We have identified some unusually persistent label-retaining cells in the hair follicles of mice, and have investigated their role in hair growth. Three-dimensional reconstruction of dorsal underfur follicles from serial sections made 14 mo after complete labeling of epidermis and hair follicles in neonatal mice disclosed the presence of highly persistent label-retaining cells associated with the first-generation follicle involved in the production of the first wave of hairs, commonly called the bulge. The label-retaining cells were most often found on the ventral surface of the first-generation follicle, five cell positions from the base, near the attachment site of the arrector pilorum muscle. No label-retaining cells were found in the hair canal, sebaceous gland, or hair germ. These label-retaining cells remained in the follicle following induction of anagen by plucking of the hairs. Surprisingly, they were not part of the first wave of mitotic activity following plucking, but instead underwent mitosis beginning 42 h after plucking. Label-retaining cells or their labeled daughters were not found in the hair germs through 48 h following induction of anagen by plucking, but instead remained in their subsebaceous follicular location even upon completion of the hair growth cycle 21 d later. These label-retaining cells are, therefore, unlikely to contribute to the formation of a new anagen follicle.