The precise identity of cancer cells of origin and the molecular events of tumor initiation in epidermal squamous cell carcinoma (SCC) are unknown. Here we show that malignancy potential is related to the developmental capacity of the initiating cancer cell in a genetically defined, intact, and inducible in vivo model. Specifically, these data demonstrate that SCCs can originate from inside the hair follicle stem cell (SC) niche or from immediate progenitors, whereas more developmentally restricted progeny, the transit amplifying (TA) cells, are unable to generate even benign tumors in the same genetic context. Using a temporal model of tumorigenesis in situ, we highlight the phenotypes of cancer progression from the hair follicle SC niche, including hyperplasia, epithelial to mesenchymal transition, and SCC formation. Furthermore, we provide insights into the inability of hair follicle TA cells to respond to tumorigenic stimuli. mouse models of cancer | tumor initiating cells | epidermal stem cells S quamous cell carcinoma (SCC), a common type of nonmelanoma skin cancer, harbors significant risk of metastasis that can eventually lead to death (1). Permanent treatment and prevention of SCC requires an improved understanding of the unique cell types capable of initiating these malignancies and the mechanisms that underlie their transformation. Mutations in the Ras gene family are found in 30% of all human cancers and are often found in human cases of SCC (2-4). Numerous animal studies have extended the understanding of SCC by demonstrating a causative role for the Ras family in the development of SCC. In these mouse models, Ras signaling has been shown to be sufficient to drive epidermal tumorigenesis through either overexpression or targeted expression of an oncogenic form of Hras or Kras. These studies have targeted broad epidermal cell populations that include stem cells (SCs), as well as cells of the outer root sheath (ORS) and interfollicular epidermis (IFE) (4-9). Among these, a landmark article indicated that the SCC cells of origin reside in the hair follicle rather than the IFE (5). However, the keratin promoter used to drive oncogenic Ras expression did not allow for a direct determination of the cancer cell of origin amongst the different cell types in the hair follicle. The candidates for an SCC cell of origin therefore remained follicular SCs, ORS cells, transit amplifying (TA) cells in the matrix, and the differentiated cells of the inner root sheath (IRS) and hair shaft. In addition, other studies have shown that lineagerestricted or differentiated cells of the IFE are sufficient to serve as cancer cells of origin when subjected to supraphysiological levels of Ras activity at sites of mechanical stress (10). These high levels of Ras expression, however, are not normally found in human cases of SCC (10, 11). Between follicular SCs and TA cells, it is not clear whether one or both are capable of initiating tumorigenesis. Thus, we sought to directly compare the malignancy potential between follicular ...