The activity of nuclear receptors is modulated by numerous coregulatory factors. Corepressors can either mediate the ability of nuclear receptors to repress transcription, or can inhibit transactivation by nuclear receptors. As we learn more about the mechanisms of transcriptional repression, the importance of repression by nuclear receptors in development and disease has become clear. The protein encoded by the mammalian Hairless (Hr) gene was shown to be a corepressor by virtue of its functional similarity to the well-established corepressors N-CoR and SMRT. Mutation of the Hr gene results in congenital hair loss in both mice and men. Investigation of Hairless function both in vitro and in mouse models in vivo has revealed a critical role in maintaining skin and hair by regulating the differentiation of epithelial stem cells, as well as a putative role in regulating gene expression via chromatin remodeling.