In this study we examine the role of Wnt7b during hair follicle (HF) development and hair follicle stem cell (hfSCs) activation during the transition from the resting, telogen phase to the actively growing, anagen phase of the hair cycle. For the first time, we reveal that Wnt7b is an important signaling component required for maintaining proper HF growth during the hair cycle as mice lacking Wnt7b protein in the skin produce hair around ~30% shorter than controls. Our findings also demonstrate that Wnt7b is a key factor required for hfSCs activation, HFs lacking Wnt7b demonstrated a significant delay in activation (which could not be compensated for by other Wnt proteins) remaining in a resting state longer than control HF. In addition, we reveal that Wnt7b-deficient hfSCs retain stem cell characteristics and can regenerate new hfSCs populations during the HF cycle but do so with slower self-renewal, perturbing growth entry in the next HF cycle. This data supports our previous model (Kandyba et al., PNAS 2013) that Bone Morphogenetic Protein (BMP) inhibition regulates ligand-dependent Wnt activation in hfSCs and demonstrates Wnt7b as a novel protein which mediates this link directly. Overall, this work highlights the intrinsic dynamic competition between Wnt/BMP signaling and provides the platform for extrinsic influence providing multiple hierarchical layers to control stem cells. Together, these findings emphasize the key importance of Wnt7b in maintaining proper HF cycle length and regulating hfSCs activation to fuel HF regeneration. This work received prestigious “Faculty of 1000” recognition.