Ectodysplasin receptor Edar and its ligand Eda A1, as well as their related receptor Xedar and ligand Eda A2, are recently discovered members of the tumor necrosis factor superfamily that signal predominantly through the nuclear factor-kappaB and c-jun N-terminal kinases pathways. Mutations in genes that encode proteins involved in Edar signaling pathway cause hypohidrotic ectodermal displasias in humans and mice and characterized by severe defects in development of ectodermal appendages including hairs, teeth, and exocrine glands. Here, we summarize the current knowledge of molecular mechanisms underlying the involvement of Edar signaling pathway in controlling hair follicle (HF) development and cycling. Genetic and experimental studies suggest that Edar signaling is involved in the control of cell fate decision in embryonic epidermis, as well as in the regulation of cell differentiation programs in the HF. Loss or gain of Edar signaling affects the initiation of several HF types (guard and zig-zag HF), hair shaft formation, as well as sebaceous gland morphology. We also review data on the cross-talk between Edar and Wnt, transforming growth factor-beta/bone morphogenic protein/activin, and Shh signaling pathways in the control of HF development and cycling.