Skin injury and several diseases elicit fibrosis and induce hair follicle (HF) growth arrest and loss. The resulting alopecia and disfiguration represent a severe burden for patients, both physically and psychologically. Reduction of profibrotic factors such as dipeptidyl peptidase 4 (DPP4) might be a strategy to tackle this issue. We show DPP4 overrepresentation in settings with HF growth arrest (telogen), HF loss, and nonregenerative wound areas in mouse skin and human scalp. Topical DPP4 inhibition with Food and Drug Administration/European Medicines Agency-approved sitagliptin on preclinical models of murine HF activation/regeneration results in accelerated anagen progress, whereas treatment of wounds with sitagliptin results in reduced expression of fibrosis markers, increased induction of anagen around wounds, and HF regeneration in the wound center. These effects are associated with higher expression of Wnt target Lef1, known to be required for HF anagen/HF-activation and regeneration. Sitagliptin treatment decreases profibrotic signaling in the skin, induces a differentiation trajectory of HF cells, and activates Wnt targets related to HF activation/growth but not those supporting fibrosis. Taken together, our study shows a role for DPP4 in HF biology and shows how DPP4 inhibition, currently used as oral medication to treat diabetes, could be repurposed into a topical treatment agent to potentially reverse HF loss in alopecia and after injury.