In order to better understand how outer root sheath (ORS) cells are able to reepithelialize superficial skin wounds, the level of epidermal differentiation achieved by isolated ORS cells in vitro was determined. Using postmitotic human dermal fibroblasts (HDF) as efficient feeder cells, large numbers of ORS cells from individual follicles were generated. Passaged ORS cells were grown exposed to air on HDF-populated collagen gels in the CRD device (Noser and Limat, In vitro 23, 541-545, 1987) which allows histiotypic tissue organization. In such recombinant organotypic cultures, ORS cells developed distinct epidermal strata comparable to interfollicular keratinocytes (NEK). Ultrastructurally, desmosomes and intermediate filaments increased in number toward the epithelial surface and small keratohyalin (KH) granules (but no large irregular KH granules as in NEK) were abundant, adjacent to an electrondense stratum corneum. Also, synthesis of epidermal suprabasal keratins (K1 and 10;2D gels) was lower in ORS cultures, but clearly visible suprabasally by immunofluorescence along with other epidermal markers (involucrin, filaggrin, surface glycoprotein gp80, pemphigus vulgaris antigen). Basement membrane components (laminin, type IV collagen, bullous pemphigoid antigen) were detectable in both ORS and NEK in these assays. Thus, phenotypic expression was largely comparable, but, whereas terminal differentiation (keratinization) was progressing in NEK cultures limiting their lifespan, this seemed to be better controlled in ORS cultures and viable cell layers persisted resulting in longer survival time.