Hair grows through a tube-like structure under the skin called a hair follicle. The bulge is a small part of the hair follicle that is the niche for hair follicle stem cells or HFSCs. HFSCs can differentiate into most skin epithelial cells, including keratinocytes and hair follicle cells. These stem cells allow the hair follicle to regenerate continuously and can also help repair epithelial wounds. At the start of the hair follicle growth phase, a small number of dormant HFSCs are activated by a cluster of mesenchymal cells, known as the dermal papilla. These activated HFSCs then terminally differentiate into the hair shaft and other hair follicle cells. The lower part of the bulge contains melanocyte stem cells which are activated along with HFSCs. These stem cells proliferate and differentiate into melanocytes which produce melanin – the pigment that naturally colors hair and skin.