Tissue interactions are essential to guide organogenesis. The development of hair follicles is regulated by inductive signalling between the embryonic surface epithelium and the adjacent mesenchyme. Previous studies have established that the mesenchymal component of the hair follicle, the dermal papilla and its precursor dermal condensate, has the capacity for de novo hair follicle induction. However, studies prior to dermal condensate formation have been inconclusive, and therefore the source and the identity of the primary inductive signal have remained unknown. Here, we performed epithelial-mesenchymal tissue recombination experiments using hair-forming back skin and glabrous plantar skin from mouse embryos to unveil that the back skin mesenchyme is inductive even prior to dermal condensate formation. Moreover, the naive, unpatterned mesenchyme was sufficient to trigger hair follicle formation even in the oral epithelium. Considering the recognized role of Wnt signalling and Bmp activity inhibition in initiation of hair follicle development, we explored the hair-inductive ability of the Wnt agonist R-spondin-1 and a Bmp receptor inhibitor in embryonic skin explants. Although R-spondin-1 instigated precocious placode-specific transcriptional responses, it alone or in combination with the Bmp receptor inhibitor was insufficient for hair follicle induction. Our findings pave the way for identifying the hair follicle-inducing cue.