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Small DNA oligonucleotides homologous to the 3′ overhang of human telomeres, called T-oligos, stimulate pigmentation in human epidermal melanocytes in vitro and in vivo. They induce UV-mimetic effects in the absence of DNA-damage, however, it is unknown how T-oligos affect human hair follicle keratinocyte and melanocyte functions in situ. Here, we present the first evidence that these oligonucleotides are powerful modulators of pigmentation and growth of microdissected, organ-cultured human scalp hair follicles. Hair follicles were incubated with T-oligo or vehicle control and were then assessed for changes in hair shaft length, follicle morphology, pigmentation, proliferation and apoptosis. After only 48 h, T-oligos induced a fourfold increase in pigmentation of human anagen VI hair bulbs, while hair matrix keratinocyte proliferation was reduced by 65%, without apparent changes in hair bulb cell apoptosis. This corresponded well with a significant inhibition of hair shaft elongation, which was not accompanied by premature catagen induction in anagen VI hair follicles. These diametrically opposed effects of T-oligos on human hair follicle melanocytes (stimulation of melanogenesis) versus human hair bulb keratinocytes (inhibition of proliferation) in situ illustrate that human hair follicle organ culture offers an excellent tool for T-oligo research. They suggest that T-oligos deserve to be further explored for the management of clinical hair growth and pigmentation disorders, and raise the possibility that this model may offer a unique “time lapse system” for studying skin and hair follicle biology and DNA repair strategies under physiologically relevant conditions.