During postnatal development, the hair follicle (HF) shows cyclic activity with periods of relative resting, active growth (anagen), and regression. We demonstrate that similar to the HF induction in embryonic skin, initiation of a new hair growth phase in postnatal skin requires neutralization of the inhibitory activity of bone morphogenetic protein 4 (BMP4) by the BMP antagonist noggin. In the resting HF, BMP4 mRNA predominates over noggin in the epithelium and mesenchyme, and the BMP receptor IA is prominently expressed in the follicular germ. Anagen development is accompanied by down‐regulation of the BMP4 and increased noggin mRNA in the HF. Furthermore, administration of noggin protein induces new hair growth phase in postnatal telogen skin in vivo. In contrast, BMP4 induces selective arrest of anagen development in the non‐tylotrich (secondary) HF. As a hair growth inducer, noggin increases Shh mRNA in the HF whereas BMP4 down‐regulates Shh. This suggests that modulation of BMP4 signaling by noggin is essential for hair growth phase induction in postnatal skin and that the hair growth‐inducing effect of noggin is mediated, at least in part, by Shh.—Botchkarev, V. A., Botchkareva, N. V., Nakamura, M., Huber, O., Funa, K., Lauster, R., Paus, R., Gilchrest, B. A. Noggin is required for induction of the hair follicle growth phase in postnatal skin. FASEB J. 15, 2205–2214 (2001)