Stem cell niches in mammalian tissues are often heterogeneous and compartmentalized, however whether distinct niche locations determine different stem cell fates remains unclear. To test this hypothesis, we utilized the mouse hair follicle niche and devised a novel approach by combining intravital microscopy with genetic lineage tracing to re-visit the same stem cell lineages, from their exact place of origin, throughout regeneration in live mice. Using this method, we show directly that the position of a stem cell within the hair follicle niche can predict whether it is likely to remain uncommitted, generate precursors or commit to a differentiated fate. Furthermore, using laser ablation we demonstrate that hair follicle stem cells are dispensable for regeneration and that epithelial cells, which do not normally participate in hair growth, re-populate the lost stem cell compartment and sustain hair regeneration. This study provides a general paradigm for niche-induced fate determination in adult tissues.