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During embryogenesis, the epidermis splits into two layers: the periderm (which is lost) and the [[Stratum germinativum|basal layer]]. The basal layer is a [[stem cell]] layer and becomes the source of skin cells throughout life. It is maintained as a stem cell layer through an [[autocrine]] signal, [[Transforming growth factor|TGF-a]] and through FGF7 or [[keratinocyte growth factor]] (KGF) produced by the dermis below the basal cells. Over-expression of these factors leads to an overproduction of granule cells and thick skin (in mice).
Hair and feathers are formed in a regular pattern and it is believed to be the result of a reaction-diffusion system. A [[reaction-diffusion system]] combines an activator, Sonic hedgehog, with an inhibitor, BMP4 or BMP2, to form clusters of cells in a regular pattern. The condensation of cells in mesoderm are induced from Sonic hedgehog-expressing epidermal cells. The clusters of mesodermal cells signal back to the epidermis to form the appropiate structure.
It is believed that the mesoderm defines the pattern. The epidermis instructs the mesodermal cells to condense and then the mesoderm instructs the epidermis of what structure to make through a series of reciprocal inductions. Transplantation experiments involving frog and newt epidermis indicated that the mesodermal signals are conserved between species however, the epidermal response is species-specific meaning that the mesoderm instructs the epidermis of its position and the epidermis uses this information to make a specific structure.