In organotypic cultures, outer root sheath (ORS) cells of the human hair follicle develop into a stratified epithelium largely reminiscent of the epidermis; this apparently reflects their importance during wound healing. In the present study, ORS cells were grown inside a three-dimensional network of extracellular matrix proteins (Matrigel), together with different mesenchymal cells, in an attempt to mimic their follicular environment. Thus, inside Matrigel, ORS cells formed spheroids differentiating toward the center and showing all the markers of epidermal keratinization. Under identical conditions, normal epidermal keratinocytes developed similar spheroids, but of a significantly smaller size. Human dermal fibroblasts and dermal papilla cells, cocultured in the matrix, had a positive influence on both the proliferation and differentiation within both types of spheroids. Epidermal differentiation markers, such as suprabasal keratins, involucrin, filaggrin, gp80 and pemphigoid antigen, were readily expressed in ORS spheroids, whereas hard (hair) keratins were not detectable by immunostaining. Cells positive for an epithelial membrane antigen, strongly expressed in sebaceous glands, were seen in numerous spheroids. In contrast to organotypic "surface" epithelia, the expression and location of different integrin chains was normalized in ORS spheroids, indicating an enhanced mesenchymal influence in this in vitro system.