Models dealing with the development of hair and feather follicles commonly predict that the factors initiating morphogenesis also specify patterns of follicle distribution. The factors have been postulated as chemical or mechanical instabilities which, at certain threshold concentrations, determine both the location of follicles and their form. The models tend to focus on the earliest waves of induction, where follicles develop at separate, non-randomly spaced initiation sites in skin. However, in many animals, there are later waves of initiation, some of which give rise to compound follicles. These are bundles of follicles that arise by branching from the necks of those formed earlier and share a common pilary canal when mature. In some species, compound follicles make the greatest numerical contribution to the follicle population.Measurements of the frequencies of single and branched follicles in sheep selection lines with different follicle densities (from previous studies by Mooreet al.) revealed that the follicles which formed first during foetal life (primary and original secondary populations) were established at separately identifiable sites in the skin, called here “initiation sites”. However, there were also later waves of development, contributing follicles exclusively by the process of branching (the derived secondary population). Final follicle densities were not correlated with the densities of initiation sites. The observations suggested that mechanisms specifying the positional values of initiation sites differed from those determining follicle number.The final densities of the follicle populations in the sheep lines were also highly negatively correlated with the diameters of the wool fibres grown. The close statistical relationship suggested that the two parameters were developmentally linked. However, whereas fibre characteristics are realised when the follicle is mature, density is established earlier, during foetal life. We have reconciled these observations with the following hypothesis: a population of cells, committed to a follicular pathway of development, differentiates in the skin at or before the first wave of initiation. Subpopulations of the committed cells subsequently participate in each follicle initiation event, the number in each subpopulation ultimately determining fibre dimensions. Follicle initiation continues until most or all of the original population have been utilised.Transplantation and skin recombinant studies have demonstrated that the cells forming the dermal papilla of the follicle participate in follicle initiation and have inductive effects on epidermal tissue. Papilla size is also correlated with fibre diameter in the mature follicle. These attributes are consistent with those described for the committed cell population.