Cultured epidermal sheets and composite skin have already been used to treat clinical cases such as severe burn patients ; however, hair follicles and sweat glands are not regenerated in vitro from adult somatic cells. To obtain better artificial skin with appendages, it is necessary to isolate the stem cells and to understand their characteristics. In the bulge region of the hair follicle, there are epidermal stem cells which can differentiate into interfollicular epidermis, sebaceous glands, and hair follicles. The stem cells of melanocytes also exist in the same area. Multipotent stem cells which can differentiate into neurons, glial cells, and smooth muscle cells can be obtained from the dermis, and mesenchymal stem cells are localized in the addipose tissue. Side population cells which have a strong capability to efflux dye (Hoechst33342) are regarded as candidates for stem cells in various tissues. They also exist in the skin. Taken together with the potentials of cell plasticity of keratinocytes and fibroblasts, we might be able to use skin as a stem cell source or a bioreactor for producing useful proteins by gene modification.