The perivascular microenvironment helps in maintaining stem cells in many tissues. We sought to determine whether there is a perivascular niche for hair follicle stem cells. The association of vessels and follicle progenitor cells began by embryonic day 14.5, when nascent hair placodes had blood vessels approaching them. By birth, a vascular annulus stereotypically surrounded the keratin 15 negative (K15-) stem cells in the upper bulge and remained associated with the K15- upper bulge throughout the hair cycle. The angiogenic factor Egfl6 was expressed by the K15- bulge and was localized adjacent to the vascular annulus, which comprised post-capillary venules. Although denervation altered the phenotype of upper bulge stem cells, the vascular annulus persisted in surgically denervated mouse skin. The importance of the perivascular niche was further suggested by the fact that vascular annuli formed around the upper bulge of de novo-reconstituted hair follicles before their innervation. Together, these findings demonstrate that the upper bulge is associated with a perivascular niche during the establishment and maintenance of this specialized region of hair follicle stem cells.