Hair follicles reconstitute themselves though the hair cycle, suggesting the presence of intrinsic stem cells. In contrast to the previous belief that stem cells reside in the bulbar region of hair follicles, stem cells were detected in the bulge area, a contiguous part of outer root sheath, that provides the insertion point for arrector pili muscle and marks the bottom of the permanent portion of hair follicles. The bulge cells are morphologically undifferentiated and slow-cycling under the normal conditions. Later, studies successively demonstrated that bulge cells possess stem cell properties such as high proliferative capacity and multipotency to regenerate not only hair follicles but also sebaceous glands and epidermis. Our knowledge of the bulge cell biology is rapidly increasing because of the identification of novel cell surface markers, the ability to isolate living bulge cells, and microarray analysis of multiple gene expression. Importantly, novel cell surface markers were identified on human bulge cells using precise laser capture microdissection and microarray analyses. Use of these markers enabled the successful enrichment of living human bulge cells, raising the possibility of future treatments of hair disorders using stem cells. Additional clinical relevance of bulge cell biology includes the importance of bulge cells as a gene therapy target and their possible roles in tumorigenesis.