We have succeeded in culturing dermal papilla (DP) cells long term and developed new techniques that enhance their hair follicle-inducing efficiency in a patch assay. The outgrowing DP cells from mouse vibrissae were markedly stimulated by 10% fetal bovine serum-Dulbecco's modified essential medium that included fibroblast growth factor-2 (FGF-2). Moreover, the potency of proliferation was maintained during serial cultivations (more than 30 passages). We combined these established DP cells with epidermal cells and implanted them subcutaneously into athymic mice to examine their hair follicle-inducing ability. New hair follicles were induced by dissociated DP cells at earlier passages (under passage 4), but the cells from later passages could not induce follicles. We next aggregated the DP cells to form spheres and then injected them with epidermal cells. Unlike the dissociated DP cells, the spheres made from the later passaged cells (more than 10 passages) did induce new hair follicles. We examined several genes specific for DP of anagen follicles and confirmed that their expression level was elevated in the spheres compared with their expression level in adherent DP cells. These results suggest that FGF-2 is essential for dermal papilla cell culture and that sphere formation partially models the intact DP, resulting in hair follicle induction, even by later passaged cells.