One of the major objectives of tissue engineering is to reconstitute skin from stem cells. This requires multipotent skin stem cells and the ability to guide these cells to form a piece of skin with proper architecture and skin appendages. Based on previous progress, we develop a simplified procedure that can be useful for large-scale screening of factors that can modulate the hair formation ability of candidate cells. Newborn mouse cells are used. Dissociated epidermal and dermal cells in high-density suspension are allowed to reconstitute in vitro to generate its own matrix, or seeded into a scaffold-like matrix already used clinically. These cells self-organize and form a reconstituted skin with proper proportions and topological organization of different components. Large numbers of hair follicles form. The cellular and molecular events are characterized, showing a distinct but parallel morphogenetic process compared to those occurring in embryonic development. The formed hair follicles can cycle and regenerate and the reconstituted skin can heal after injury. The skins are in good condition 1 year after transplant. This procedure enables flexible size and shape of the reconstituted skin, so clinical applications can be envisioned for the future when large numbers of multipotential skin stem cells become available.