Several forms of hair loss in humans are characterized by the inability of hair follicles to enter the growth phase (anagen) of the hair cycle after being arrested in the resting phase (telogen). Current pharmacologic therapies have been largely unsuccessful in targeting pathways that can be selectively modulated to induce entry into anagen. We show that topical treatment of mouse and human skin with small-molecule inhibitors of the Janus kinase (JAK)-signal transducer and activator of transcription (STAT) pathway results in rapid onset of anagen and subsequent hair growth. We show that JAK inhibition regulates the activation of key hair follicle populations such as the hair germ and improves the inductivity of cultured human dermal papilla cells by controlling a molecular signature enriched in intact, fully inductive dermal papillae. Our findings open new avenues for exploration of JAK-STAT inhibition for promotion of hair growth and highlight the role of this pathway in regulating the activation of hair follicle stem cells.