Epigenetic mechanisms controlling adult mammalian stem cell (SC) dynamics might be critical for tissue regeneration but are poorly understood. Mouse skin and hair follicle SCs (HFSCs) display reduced histone H3 K4me3, K9me3, and K27me3 methylation levels (hypomethylation) preceding hair growth. Chemical inhibition of relevant histone demethylases impairs subsequent differentiation and growth of HFs and delays wound healing. In wounding, this impairs epithelial cell differentiation and blood vessel recruitment, but not proliferation and fibroblast recruitment. With Aspm-CreER as a newfound inter-follicular epidermis lineage-labeling tool, and Lgr5-CreER for hair follicles, we demonstrate a reduced contribution of both lineages to wound healing after interfering with hypomethylation. Blocked hypomethylation increases BMP4 expression and selectively upregulates H3 K4me3 on the Bmp4 promoter, which may explain the effects on HFSC quiescence, hair cycle, and injury repair. Thus, transient hypomethylation of histone H3 K4/9/ 27me3 is essential for adult skin epithelial SC dynamics for proper tissue homeostasis and repair.