Genetic studies suggest that the major events of human hair follicle development are similar to those in mice, but detailed analyses of this process are lacking. In mice, hair follicle placode "budding" is initiated by invagination of Wnt-induced epithelium into the underlying mesenchyme. Modification of adherens junctions (AJs) is clearly required for budding. Snail-mediated downregulation of AJ component E-cadherin is important for placode budding in mice. Beta-catenin, another AJ component, has been more difficult to study owing to its essential functions in Wnt signaling, a prerequisite for hair follicle placode induction. Here, we show that a subset of human invaginating hair placode cells expresses the stem cell marker CD133 during early morphogenesis. CD133 associates with membrane beta-catenin in early placodes, and its continued expression correlates with loss of beta-catenin and E-cadherin from the cell membrane at a time when E-cadherin transcriptional repressors Snail and Slug are not implicated. Stabilization of CD133 via anti-CD133 antibody treatment of human fetal scalp explants depresses beta-catenin and E-cadherin membrane localization. We discuss this unique correlation and suggest a hypothetical model whereby CD133 promotes morphogenesis in early hair follicle placodes through the localized removal of membrane beta-catenin proteins and subsequent AJ dissolution.