Objective To investigate the possibility of hair follicle reformation induced by dermal papilla cells in vivo and in vitro. Methods Dermal papilla cells, dermal sheath fibroblasts obtained by enzyme digestion were mixed with collagen to form mesenchymal cell populationed collagen gel. Superior and inferior epithelial cells and bulb matrical cells then were cultured on these gel as organotypic culture to recombine bilayer artificial skin. Dermal papilla cells and outer root sheath keratinocytes were mingled and transplanted under subcutaneous tissue of the dorsal skin of nude mice. Hair follicle formation was observed by histological examination. Results These recombinants all reformed bilayer structure like nature skin.Hair follicle reformation was found in dermal sheath fibroblast-populationed collagen gel combined with superior and inferior epithelial cells. Dermal papilla cells also induced superior and inferior epithelial cells to from hair follicle on nude mice. Lowe passage dermal papilla cells mixed with hair follicle epithelial cells formed many trpical hair follicle structures and produced hair fiber after transplanted on nude mice. Conclusion The dermal part of hair follicle, such as dermal papilla cells and dermal sheath fibroblsast, have the ability to induce hair follicel formation by interaction between the epithelial cells of hair follicle.