The study conducted by UT Southwestern Medical Center in Dallas said the scientists made the discovery by accident while researching how certain cancer tumors form.
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Researchers said they found that a protein called KROX 20, commonly associated with nerve development, turned on in skin cells that become the hair shaft.
The cells produce a protein called stem cell factor, which was essential for hair color.
When scientists deleted the stem cell factor gene in the hair cells of mice, their fur turned white.
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When scientists deleted the other protein KROX 20, no hair grew and the mice became bald.
The study, published in the Genes and Development Journal, can be read here.
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