It has been suggested that the bulge of the hair follicle contains a pool of follicular stem cells that may serve as a target site of graft-versus-host disease and as a source of cells with carcinogenic potential. The bulge is prominent in the developing follicle although it is a subtle swelling in the adult follicle. In this paper, we studied the bulge in human fetal skin specimens. Ultrastructurally, the bulge cells, especially the interior cells, have abundant free ribosomes and glycogen particles, but almost no cytoplasmic organelles indicative of differentiation. Immunostaining with several specific anti-keratin antibodies demonstrated that the bulge cells express keratins of both stratified and simple epithelia. Melanocytes and Merkel cells, defined by immunohistochemical and ultrastructural criteria, are seen among bulge cells. Laser confocal microscopy revealed that primitive smooth muscle cells attached directly to the bulge initially at the mid-bulbous hair peg, the stage when the bulge is most prominent. K-laminin and type VII collagen are strongly expressed in the dermoepidermal junction of the bulge and between the matrix area of the bulb and the dermal papilla. Thus, the bulge of human hair follicle is not only an attachment site for arrector pili muscle, but also a pool of keratinocytes that are relatively undifferentiated.