Hair follicles form during embryonic development and, after birth, undergo recurrent cycling of growth, regression, and relative quiescence. As a functional mini-organ, the hair follicle develops in an environment with dynamic and alternating changes of diverse molecular signals. Over the past decades, genetically engineered mouse models have been used to study hair follicle morphogenesis and significant advances have been made toward the identification of key signaling pathways and the regulatory genes involved. In contrast, much less is understood in signals regulating hair follicle regeneration. Like hair follicle development, hair follicle regeneration probably relies on populations of stem cells that undergo a highly coordinated and stepwise program of differentiation to produce the completed structure. Here, we review recent advances in the understanding of the molecular signals underlying hair follicle morphogenesis and regeneration, with a focus on the initiation of the primary hair follicle structure placode. Knowledge about hair follicle morphogenesis may help develop novel therapeutic strategies to enhance cutaneous regeneration and improve wound healing.