Hair growth can be induced from resting mouse hair follicles by topical application of JAK inhibitors, suggesting that JAK-STAT signaling is required for maintaining hair follicle stem cells (HFSCs) in a quiescent state. Here, we show that Oncostatin M (OSM), an IL-6 family cytokine, negatively regulates hair growth by signaling through JAK-STAT5 to maintain HFSC quiescence. Genetic deletion of the OSM receptor or STAT5 can induce premature HFSC activation, suggesting that the resting telogen stage is actively maintained by the hair follicle niche. Single-cell RNA sequencing revealed that the OSM source is not intrinsic to the hair follicle itself and is instead a subset of TREM2 macrophages that is enriched within the resting follicle and deceases immediately prior to HFSC activation. In vivo inhibition of macrophage function was sufficient to induce HFSC proliferation and hair cycle induction. Together these results clarify how JAK-STAT signaling actively inhibits hair growth.