Notch genes encode evolutionarily conserved large, single transmembrane receptors, which regulate many cell fate decisions and differentiation processes during fetal and postnatal life. Multiple Notch receptors and ligands are expressed in both developing and adult epidermis and hair follicles. Proliferation and differentiation of these two ectodermal-derived structures have been proposed to be controlled in part by the Notch pathway. Whether Notch signaling is involved in postnatal hair homeostasis is currently unknown. Here, we investigate and compare the role of the Notch1 receptor during embryonic hair follicle development and postnatal hair homeostasis using Cre-loxP based tissue specific and inducible loss-of-function approaches. During embryonic development, tissue-specific ablation of Notch1 does not perturb formation and patterning of hair follicle placodes. However, Notch1 deficient hair follicles invaginate prematurely into the dermis. Embryonic as well as postnatal inactivation of Notch1 shortly after birth or in adult mice results in almost complete hair loss followed by cyst formation. The first hair cycle of Notch1 deficient mice is characterized by shortened anagen and a premature entry into catagen. These data show that Notch1 is essential for late stages of hair follicle development during embryogenesis as well as for post-natal hair follicle development and hair homeostasis.