Prominin-1/CD133 (Prom1) is expressed by fibroblasts in the dermal papilla (DP) of the hair follicle (HF). By examining endogenous Prom1 expression and expression of LacZ in the skin of Prom1CreERLacZ (Prom1C-L) mice, in which a CreERT2-IRES-nuclear LacZ cassette is knocked into the first ATG codon of Prom1, we confirmed that Prom1 is expressed in the DP of all developing HFs and also by postnatal anagen follicles. To analyze the fate of Prom1+ DP cells, we crossed Prom1C-L mice with Rosa26-CAG flox/stop/flox tdTomato reporter mice and applied 4-hydroxytamoxifen (4OHT) to back skin at postnatal day (P) 1 and P2. We detected tdTomato+ cells in ~50% of DPs. The proportion of labeled cells per DP increased between P5 and P63, while the total number of cells per DP declined. Following full thickness wounding, there was no migration of tdTomato-labeled cells out of the DP. When β-catenin was activated in Prom1+ DP cells there was an increase in the size of anagen and telogen DP, but the proportion of tdTomato-labeled cells did not increase. We conclude that Prom1+ DP cells do not contribute to dermal repair but are nevertheless capable of regulating DP size via β-catenin-mediated intercellular communication.