Investigations of the signalling between epithelial and mesenchymal compartments of skin during hair follicle initiation in utero and hair cycling have revealed the importance of the TGFbeta superfamily in ectodermal organogenesis and morphogenesis. In particular the activins, their receptors and binding proteins such as follistatin, have been shown to be important regulators of cell proliferation, differentiation and apoptosis in hair follicle initiation, hair cycling, normal skin homeostasis and wound healing. Transgenic mice lacking various components of the activin signalling pathways display varying ectodermal pathologies including altered pelage hair follicle initiation. This review summarises the activin signal transduction pathways and the interactions between activins and other TGFbeta signalling systems during hair follicle formation, hair growth cycling, skin function and wound healing.