Morphogenesis of hair follicles, teeth, and mammary glands depends on inductive epithelial-mesenchymal interactions mediated by a conserved set of signalling molecules. The early development of different skin appendages is remarkably similar. Initiation of organogenesis is marked by the appearance of a local epithelial thickening, a placode, which subsequently invaginates to produce a bud. These early developmental stages require many of the same genes and signalling circuits and consequently alterations in them often cause similar phenotypes in several skin appendages. After the bud stage, these organs adopt diverse patterns of epithelial growth, reflected in the usage of more divergent genes in each.