The hair follicle is a model system for studying epithelial-mesenchymal interactions during organogenesis. Although analysis of the epithelial contribution to these interactions has progressed rapidly, the lack of tools to manipulate gene expression in the mesenchymal component, the dermal papilla, has hampered progress towards understanding the contribution of these cells. In this work, Corin was identified in a screen to detect genes specifically expressed in the dermal papilla. It is expressed in the dermal papilla of all pelage hair follicle types from the earliest stages of their formation, but is not expressed elsewhere in the skin. Mutation of the Corin gene reveals that it is not required for morphogenesis of the hair follicle. However, analysis of the ;dirty blonde' phenotype of these mice reveals that the transmembrane protease encoded by Corin plays a critical role in specifying coat color and acts downstream of agouti gene expression as a suppressor of the agouti pathway.