Researchers at Durham University, UK, and Columbia University Medical Center (CUMC), USA, have devised the method which is the first to use cloned human cells to induce hair growth, rather than redistributing hair from one part of the scalp to another.
The researchers said their findings could significantly expand the use of hair transplantation to women with hair loss, who tend to have insufficient donor hair, as well as to men in early stages of baldness.
The research could also be "an important step" in creating replacement skin with hair follicles to aid the recovery of burn patients, the scientists said.
The study is published in the online edition of Proceedings of the National Academy of Sciences (PNAS).
Previous research by Professor Colin Jahoda at Durham University found that rodent dermal papillae – a small, group of cells at the base of the hair follicle which play a pivotal role in hair growth – could be easily harvested and transplanted back into rodent skin.
Unlike human dermal papillae, rodent papillae tend to spontaneously clump together creating their own tissue environment, and since they remained as a collective this ultimately helped them to reprogramme the recipient skin to grow new follicles.
Study first author Dr Claire Higgins, a Durham University graduate, now based at CUMC, said this suggested that if human papillae could be cultured to encourage them to clump together as they do in rodents, the conditions could be created to induce hair growth in human skin.
To test this theory, researchers at CUMC harvested dermal papillae from seven human donors and cloned the cells in tissue culture. No additional growth factors were added to the cultures.
After a few days, the cultured papillae were transplanted between the dermis and epidermis layers of human skin that had been grafted onto the backs of mice. In five of the seven tests, the transplants resulted in new hair growth that lasted at least six weeks.
DNA analysis confirmed that the new hair follicles were human and genetically matched the donors.
More work needs to be done before the method can be tested in humans, according to the researchers, but the team is optimistic that clinical trials could begin in the near future.
Study co-author Professor Colin Jahoda, in the School of Biological and Biomedical Sciences, at Durham University said: "We need to establish the origins of the critical intrinsic properties of the newly induced hairs, such as their hair cycle kinetics, colour, angle, positioning, and texture.
"We also need to establish the role of the host epidermal cells that the dermal papilla cells interact with, to make the new structures."
Professor Jahoda, who is also Co-Director of the North East Stem Cell Institute (NESCI), added: "Ultimately we think that this study is an important step toward the goal of creating a replacement skin that contains hair follicles for use with, for example, burn patients."
Dr Angela M Christiano, PhD, the Richard and Mildred Rhodebeck Professor of Dermatology and Professor of Genetics & Development, at CUMC, said the research "has the potential to transform the medical treatment of hair loss.
She added: "About 90 percent of women with hair loss are not strong candidates for hair transplantion surgery because of insufficient donor hair.
"This method offers the possibility of inducing large numbers of hair follicles or rejuvenating existing hair follicles, starting with cells grown from just a few hundred donor hairs. This approach could make hair transplantation available to individuals with a limited number of follicles, including those with female-pattern hair loss, scarring alopecia, and hair loss due to burns."
According to Dr Christiano, such patients gain little benefit from existing hair-loss medications, which tend to slow the rate of hair loss but usually do not stimulate robust new hair growth.
She said: "Current hair-loss medications tend to slow the loss of hair follicles or potentially stimulate the growth of existing hairs, but they do not create new hair follicles. Neither do conventional hair transplants, which relocate a set number of hairs from the back of the scalp to the front.
"Our method, in contrast, has the potential to actually grow new follicles using a patient's own cells. This could greatly expand the utility of hair restoration surgery to women and to younger patients-now it is largely restricted to the treatment of male-pattern baldness in patients with stable disease."