Skin-derived precursor cells (SKPs) are multipotent neural crest-related stem cells that grow as self-renewing spheres and are capable of generating neurons and myelinating glial cells. SKPs are of clinical interest because they are accessible and potentially autologous. However, although spheres can be readily isolated from embryonic and neonatal skin, SKP frequency falls away sharply in adulthood, and primary sphere generation from adult human skin is more problematic. In addition, the culture-initiating cell population is undefined and heterogeneous, limiting experimental studies addressing important aspects of these cells such as the behavior of endogenous precursors in vivo and the molecular mechanisms of neural generation. Using a combined fate-mapping and microdissection approach, we identified and characterized a highly enriched niche of neural crest-derived sphere-forming cells within the dermal papilla of the hair follicle of adult skin. We demonstrated that the dermal papilla of the rodent vibrissal follicle is 1,000-fold enriched for sphere-forming neural crest-derived cells compared with whole facial skin. These "papillaspheres" share a phenotypic and developmental profile similar to that of SKPs, can be readily expanded in vitro, and are able to generate both neuronal and glial cells in response to appropriate cues. We demonstrate that papillaspheres can be efficiently generated and expanded from adult human facial skin by microdissection of a single hair follicle. This strategy of targeting a highly enriched niche of sphere-forming cells provides a novel and efficient method for generating neuronal and glial cells from an accessible adult somatic source that is both defined and minimally invasive.