Androgens regulate many aspects of human hair growth in both sexes. After puberty they transform tiny vellus follicles in many areas, e.g. the face, to terminal ones producing long, thick, pigmented hairs. In genetically predisposed individuals, androgens also cause the reverse transformation of terminal scalp follicles into vellus ones, causing balding. In the current hypothesis for androgen action, androgens control most follicular cells indirectly acting via the mesenchyme-derived dermal papilla which regulates many aspects of follicular activity. In this model androgens binding to androgen receptors in dermal papilla cells alter their production of regulatory molecules which influence other follicular components; these molecules may be soluble paracrine factors and/or extracellular matrix proteins. This hypothesis is supported by immunohistochemical localisation of androgen receptors in dermal papilla cell nuclei and the demonstrations that androgen receptor content and testosterone metabolism patterns of cultured dermal papilla cells from various body sites reflect hair growth in androgen-insensitivity syndromes. The next question is whether androgens alter the paracrine factors secreted by dermal papilla cells. Cultured dermal papilla cells do release soluble, proteinaceous factors into their media which stimulate the growth of keratinocytes and other dermal papilla cells. This mitogenic potential can cross species from humans to rodents. Importantly, testosterone in vitro stimulates the mitogenic potential of beard cells, but in contrast inhibits production by balding scalp cells reflecting their in vivo androgenic responses. Since androgens in vitro do alter the secretion of paracrine factors the current focus lies in identifying specific factors produced, e.g. IGF-I and stem cell factor (SCF), using ELISA and RT-PCR, and comparing their expression in cells from follicles with varying responses to androgens in vivo or under androgen stimulation in vitro. This should lead to greater understanding of androgen action and enable the development of better treatment for androgen-potentiated disorders.