Mammalian body hairs align along the anterior-posterior axis and offer a striking but poorly understood example of global cell polarization, a phenomenon known as planar cell polarity (PCP). We’ve discovered that during embryogenesis, dramatic changes in cell shape and cytoskeletal polarization occur as nascent hair follicles (HFs) become anteriorly angled, morphologically polarized and molecularly compartmentalized along the A–P axis. Interestingly, HF initiation coincides with asymmetric redistribution of Vangl2, Celsr1 and Fzd6 within the embryonic epidermal basal layer. Moreover, loss of function mutations in Vangl2 and Celsr1 unveil their essential role in HF polarization and orientation, which develop in part, through nonautonomous mechanisms. Vangl2 and Celsr1 are mutually required for their planar localization in vivo, and physically associate in a complex in vitro. Finally, we provide evidence in vitro that homotypic interactions of Celsr1 intercellularly are required to recruit Vangl2 and Fzd6 to sites of cell-cell contact.