Dermal cells from neonatal mice can initiate the formation of hair follicles (HFs) when combined with adult mouse epidermal cells and transplanted subcutaneously into athymic mice. In the present study, the effects of dermal cells on HF formation were tested in terms of total cell number and the time course of cell harvest. Results demonstrated that the number of dermal cells is critical to the formation of HF. Furthermore, hair forming ability is rapidly decreasing as the neonatal mice age. To examine potential differences in gene expression, cDNA array was performed. Results demonstrate that numerous molecules which are directly involved in receptor and signaling correlated with decreased hair inductivity in early time points after delivery. It is reported that bone morphogenic protein (BMP)-6 and Wnt3a treatment increased hair inductivity of dermal papilla cells. But in our study, no changes were observed in the expression levels of BMP-6 and Wnt3a. However, several Wnt related genes demonstrate increased or decreased expression levels. Thus, our results suggest that co-ordinated regulation of these molecules will be important in hair neogenesis within our model system.