Regulation of adult stem cells (SCs) is fundamental for organ maintenance and tissue regeneration. On the body surface, different ectodermal organs exhibit distinctive modes of regeneration and the dynamics of their SC homeostasis remain to be unraveled. A slow cycling characteristic has been used to identify SCs in hair follicles and sweat glands; however, whether a quiescent population exists in continuously growing nails remains unknown. Using an in vivo label retaining cells (LRCs) system, we detected an unreported population of quiescent cells within the basal layer of the nail proximal fold, organized in a ring-like configuration around the nail root. These nail LRCs express the hair stem cell marker, keratin 15 (K15), and lineage tracing show that these K15-derived cells can contribute to both the nail structure and peri-nail epidermis, and more toward the latter. Thus, this stem cell population is bifunctional. Upon nail plucking injury, the homeostasis is tilted with these SCs dominantly delivering progeny to the nail matrix and differentiated nail plate, demonstrating their plasticity to adapt to wounding stimuli. Moreover, in vivo engraftment experiments established that transplanted nail LRCs can actively participate in functional nail regeneration. Transcriptional profiling of isolated nail LRCs revealed bone morphogenetic protein signaling favors nail differentiation over epidermal fate. Taken together, we have found a previously unidentified ring-configured population of bifunctional SCs, located at the interface between the nail appendage organ and adjacent epidermis, which physiologically display coordinated homeostatic dynamics but are capable of rediverting stem cell flow in response to injury.