This chapter summarizes the evidence that defined compartments of the hair follicle (HF) and nail epithelium maintain an area of relative immune privilege (IP). HF and nail IP is chiefly characterized by absent or very low level of expression of major histocompatibility complex class Ia antigens, complemented by a number of factors, such as the local production of potent immunosuppressive agents, dysfunction of professional antigen-presenting cells and inhibition of natural killer cell activities. In the hair bulb, IP is seen only in the anagen stage of HF cycling, while the nail apparatus continuously maintains an IP site in its proximal nail matrix, since the nail apparatus does not cycle. Possibly, the (non-cycling) bulge area of human scalp HFs also enjoys some relative, stably maintained IP, even though it is not as pronounced as the IP of the anagen hair bulb. A collapse of HF and nail IP likely plays a key role in the pathogenesis of one of the most common organ-specific autoimmune diseases, alopecia areata. Therefore, the therapeutic restoration of IP collapse promises to be a particularly effective future strategy for the treatment of alopecia areata.