In early postnatal mouse skin, the NG2 proteoglycan is expressed in the subcutis, the dermis, the outer root sheath of hair follicles, and the basal keratinocyte layer of the epidermis. With further development, NG2 is most prominently expressed by stem cells in the hair follicle bulge region, as also observed in adult human skin. During telogen and anagen phases of the adult hair cycle, NG2 is also found in stem cell populations that reside in dermal papillae and the outer root sheaths of hair follicles. Ablation of NG2 produces alterations in both the epidermis and subcutis layers of neonatal skin. Compared with wild type, the NG2 null epidermis does not achieve its full thickness due to reduced proliferation of basal keratinocytes that serve as the stem cell population in this layer. Thickening of the subcutis is also delayed in NG2 null skin due to deficiencies in the adipocyte population.