Recent work has focused on the hair follicle as the main source of multipotent stem cells in the skin. The hair follicle bulge contains multipotent stem cells that can form the epidermis, hair follicles and sebaceous glands and help in repopulation of the epidermis after injury. The localization of these stem cells to the bulge area may explain why some types of inflammatory alopecia cause permanent loss of hair (cicatricial alopecia) (such as lichen planopilaris and discoid lupus erythematosus), while others (such as alopecia areata) are reversible (noncicatricial alopecia). The lack of distinctive bulge morphology in human hair follicles has hampered studies of bulge cells. To date, the best marker for bulge stem cells in human hair is cytokeratin (CK) 15; human bulge cells have been reported to express CK15 selectively throughout all stages of the hair cycle in different types of follicles. There is direct evidence in the mouse, and indirect evidence in the human, that compromising the integrity of the sebaceous gland and/or bulge is important in the development of alopecia. Several interesting studies have been done in the last few years to investigate the role of stem cells in alopecia, especially nonscarring types. This is a review about the role of stem cells in the pathogenesis of alopecia (scarring and nonscarring).