During normal development, the epidermis and hair follicle are distinct lineage compartments maintained by independent stem cell populations. Both epidermal and follicular keratinocytes are recruited to participate in epidermal repair in response to injury. However, it is generally thought that follicular cells contribute to the wound epidermis only transiently and are ultimately replaced by the progeny of stem cells derived from the original epidermal compartment prior to wounding. Here we use inducible and constitutive cre recombinase expressed from the Sonic hedgehog locus (Shh) for in vivo lineage tracing. This analysis confirms that follicular cells participate in the initial resurfacing of the wound but also reveals that their progeny persist in wound epidermis for months after the wound is healed. It further demonstrates that Shh is not induced in keratinocytes during the wound healing process. We conclude that follicular cells can undergo reprogramming to become long‐term repopulating epidermal progenitors following wounding.—Levy, V., Lindon, C., Zheng, Y., Harfe, B. D., Morgan, B. A. Epidermal stem cells arise from the hair follicle after wounding. FASEB J. 21, 1358–1366 (2007)