As essential skin appendages, hair follicles exhibit complex developmental and regenerative processes shaped by the skin microenvironment. Imbalances in skin microenvironmental homeostasis are often accompanied by follicle miniaturization and even hair loss. In studying the mechanisms of hair follicle development, in addition to focusing on the self-regulation of intrinsic signaling within the follicle, it is also crucial to examine the remodeling of the follicular microenvironment triggered by dynamic changes in the skin microenvironment. Herein, we review the individual and combined roles of various cells, tissues, signaling molecules, and metabolic alterations within the skin microenvironment in hair follicle development. Moreover, we summarize the potential applications of the skin microenvironment in treating hair-related diseases, highlight the existing challenges and limitations in the research field, and provide perspectives on future research directions, aiming to elucidate the critical role of the skin microenvironment in regulating hair follicle development.