The hair follicle bulge has attracted great interest as a stem cell repository. Previous studies have focused on rodent or human bulge stem cells, and our understanding of those in other species is limited. In this study, we attempted to localize and characterize stem cell candidates in canine hair follicles. The canine skin xenografting study located label-retaining cells in the outer root sheath around the insertion point of the arrector pili muscle, where the immunoreactivity of human bulge markers, keratin 15 and follistatin, were detected. Canine bulge cell-enriched keratinocytes up-regulated human bulge biomarkers CD200 and DIO2, and conserved key cell regulators of bulge stem cells, such as SOX9 and LHX2. Importantly, canine bulge-derived keratinocytes were highly proliferative in vitro and, when combined with trichogenic dermal cells, reconstituted pilosebaceous structures as well as the epidermis in vivo. Successful detection of canine specific DNA sequences suggested that the regenerated tissue was of canine origin. In addition, canine specific bulge cell and sebocyte lineage markers were expressed in reconstituted pilosebaceous units, implying the multipotency of canine bulge cells. Our findings demonstrate a unique strategy utilizing canine bulge cells to investigate human stem cell biology and intractable hair disorders that involve the bulge region.