We previously demonstrated that keratin 15 expressing cells present in the bulge region of hair follicles exhibit properties of adult stem cells. We have now established and characterized an immortalized adult epithelial stem cell line derived from cells isolated from the human hair follicle bulge region. Telogen hair follicles from human skin were microdissected to obtain an enriched population of keratin 15 positive skin stem cells. By expressing human papillomavirus 16 E6/E7 genes in these stem cells, we have been able to culture the cells for >30 passages and maintain a stable phenotype after 12 mo of continuous passage. The cell line was compared to primary stem cells for expression of stem cell specific proteins, for in vitro stem cell properties, and for their capacity to differentiate into different cell lineages. This new cell line, named Tel-E6E7 showed similar expression patterns to normal skin stem cells and maintained in vitro properties of stem cells. The cells can differentiate into epidermal, sebaceous gland, and hair follicle lineages. Intact beta-catenin dependent signaling, which is known to control in vivo hair differentiation in rodents, is maintained in this cell line. The Tel-E6E7 cell line may provide the basis for valid, reproducible in vitro models for studies on stem cell lineage determination and differentiation.