The bulge region of adult murine hair follicles harbors epidermal stem cells with multipotent capacity; however, the restricted contributions of these cells under homeostatic conditions indicates that additional stem or progenitor cell populations may be required to maintain squamous and sebaceous lineages. We have identified a distinct population of murine hair follicle keratinocytes residing in the upper isthmus (UI) between the infundibulum and bulge regions that are distinguished by low alpha6 integrin levels and are negative for CD34 and Sca-1. Purified UI cells give rise to long-term, stable epidermal, follicular and sebaceous lineages and can self-renew in vivo. These cells are non-quiescent and possess a unique transcript profile compared with bulge stem cells and may represent a distinct reservoir of epidermal stem or progenitor cells.