An important step in understanding minoxidil's mechanism of action on hair follicles was to determine the drug's active form. We used organ-cultured vibrissa follicles to test whether it is minoxidil or its sulfated metabolite, minoxidil sulfate, that stimulates hair growth. Follicles from neonatal mice were cultured with or without drugs and effects were assessed by measuring incorporation of radiolabeled cysteine in hair shafts of the treated follicles. Assays of minoxidil sulfotransferase activity indicated that vibrissae follicles metabolize minoxidil to minoxidil sulfate. Dose-response studies showed that minoxidil sulfate is 14 times more potent than minoxidil in stimulating cysteine incorporation in cultured follicles. Three drugs that block production of intrafollicular minoxidil sulfate were tested for their effects on drug-induced hair growth. Diethylcarbamazine proved to be a noncompetitive inhibitor of sulfotransferase and prevented hair growth stimulation by minoxidil but not by minoxidil sulfate. Inhibiting the formation of intracellular PAPS with chlorate also blocked the action of minoxidil but not of minoxidil sulfate. Acetaminophen, a potent sulfate scavenger blocked cysteine incorporation by minoxidil. It also blocked follicular stimulation by minoxidil sulfate apparently by directly removing the sulfate from the drug. Experiments with U-51,607, a potent minoxidil analog that also forms a sulfated metabolite, showed that its activity was inhibited by both chlorate and diethylcarbamazine. These studies show that sulfation is a critical step for hair-growth effects of minoxidil and that it is the sulfated metabolite that directly affects hair follicles.