Project Summary The hair cycle involves remarkable remodeling of growing hair follicles (HF) in repeated phases of progenitor death and follicle regression, rest and new hair growth. It is therefore an excellent model for studying regression and regeneration processes that are executed by epithelial stem cells (SC) and progenitors and regulated by the niche microenvironment. Signals from the dermal papilla (DP) regulate progenitor proliferation and differentiation in the bulb of growing HFs, and induce SCs in the hair germ during the rest-to-growth transition to regenerate fully growing HFs. Recently, signals from the DP were implicated to induce also progenitor death during catagen regression. During regression, the DP itself needs to relocate from the base of growing bulbs to the SC reservoir in the upper HF. How this is accomplished has been unknown for decades. We previously identified the dermal sheath (DS) as a functional smooth muscle that contracts to physically relocate the DP to reach its essential SC- adjacent position. Here, we will test whether the DS is a potential signaling source that regulates progenitor death, a process equally essential for propelling catagen regression. We have discovered that the DS dynamically produces many signaling molecules including transforming growth factor beta (TGF), which was previously implicated in progenitor death by TGF signals from the DP. With additional preliminary data we found, however, that the DP is dispensable for pruning progenitor numbers and that the DS is the essential signal source for regulating follicle regression. In our studies, we will rigorously test the hypothesis that the DS constitutes a signaling niche that through TGF signaling controls regression in the hair cycle. We will selectively and inducibly ablate the DS and DP during hair growth and unequivocally determine their requirement for catagen initiation and progenitor death. We will explore expression of TGFβ pathway components in the DS and TGFβ signaling in the progenitors, establish a key role of DS-derived TGFβ signaling in progenitor pruning by Tgfβ1 ablations and identify downstream transcriptional targets with combinatorial pSmad2 chromatin immunoprecipitation and transposase-accessible chromatin sequencing analyses. Finally, we will determine the molecular components of the TGFβ activation complex at the progenitor-DS interface by smFISH and IF, and decipher how DS contraction-mediated forces activate TGFβ signaling in whole-follicle contraction assays. Overall, this work will define key physiological functions of the follicle sheath for regulating progenitor fate, which may be useful for developing HF regenerative approaches, including manipulating catagen pruning of progenitors.