Organ regenerative therapy aims to reproduce fully functional organs to replace organs that have been lost or damaged as a result of disease, injury, or aging. For the fully functional regeneration of ectodermal organs, a concept has been proposed in which a bioengineered organ is developed by reproducing the embryonic processes of organogenesis. Here, we show that a bioengineered hair follicle germ, which was reconstituted with embryonic skin-derived epithelial and mesenchymal cells and ectopically transplanted, was able to develop histologically correct hair follicles. The bioengineered hair follicles properly connected to the host skin epithelium by intracutaneous transplantation and reproduced the stem cell niche and hair cycles. The bioengineered hair follicles also autonomously connected with nerves and the arrector pili muscle at the permanent region and exhibited piloerection ability. Our findings indicate that the bioengineered hair follicles could restore physiological hair functions and could be applicable to surgical treatments for alopecia.