Skin-derived Precursors (SKPs) are multipotent, self-renewing adult dermal stem cells able to differentiate into functional neural and mesenchymal progeny. SKPs reside within a specialized niche including both the hair follicle dermal papilla and dermal sheath and function to induce hair follicle morphogenesis and cyclic regeneration. However, the factors regulating their behavior are not understood. My work demonstrates that Platelet-derived Growth Factor (PDGF) is a key regulator of SKP function within their hair follicle niche. Using adult SKPs I show that growth in the presence of PDGF-B promotes increased SKP proliferation and self-renewal in vitro, as well as increased hair follicle formation in an ex vivo hair growth assay. Finally, my work identifies the hair follicle epithelium (outer root sheath) and potentially dermal adipocytes as a source of PDGF in the skin. Understanding this regulation will improve our ability to expand SKP numbers and quality for therapeutic application following skin injury.