The skin protects mammals from insults, infection and dehydration and enables thermoregulation and sensory perception. Various skin-resident cells carry out these diverse functions. Constant turnover of cells and healing upon injury necessitate multiple reservoirs of stem cells. Thus, the skin provides a model for studying interactions between stem cells and their microenvironments, or niches. Advances in genetic and imaging tools have brought new findings about the lineage relationships between skin stem cells and their progeny and about the mutual influences between skin stem cells and their niches. Such knowledge may offer novel avenues for therapeutics and regenerative medicine.