currently, engineered skin substitutes (ess) are unable to regenerate cutaneous appendages. recent studies have shown that skin-derived precursors (skps), which are extensively available, have the potential to induce hair follicle neogenesis. here, we demonstrate that ess consisting of cultureexpanded skps and epidermal stem cells (epi-scs) reconstitute the skin with hair follicle regeneration after grafting into nude mice. skps seeded in a c-gag matrix proliferated and expressed higher levels of hair induction signature genes-such as akp2, sox2, cd133 and bmp6-compared to dermal fibroblasts. moreover, when ess prepared by seeding a mixture of culture-expanded murine skps and human adult epi-scs into a c-gag matrix was grafted into full-thickness skin wounds in nude mice, black hairs were generated within 3 weeks. immunofluorescence analysis showed that the skps were localized to the dermal papillae of the newly-formed hair follicle. our results indicate that skps can serve as the hair-inductive cells in ess to furnish it with hair genesis potential promising product due to their favorable clinical results in wound healing [1-3]. the ess is able to form a functional epidermal barrier after transplantation onto the wound bed, but do not generate epidermal appendages, e.g. hair follicles, sebaceous glands, and sweat glands; thereby, the structure and function of the skin are not fully restored [4-6]. an ess capable of regenerating the epidermis and the epidermal appendages has been a challenge.