How dermis maintains tissue homeostasis in cyclic growth and wounding is a fundamental unsolved question. Here, we study how dermal components of feather follicles undergo physiological (molting) and plucking injury-induced regeneration in chickens. Proliferation analyses reveal quiescent, transient-amplifying (TA) and long-term label-retaining dermal cell (LRDC) states. During the growth phase, LRDCs are activated to make new dermal components with distinct cellular flows. Dermal TA cells, enriched in the proximal follicle, generate both peripheral pulp, which extends distally to expand the epithelial-mesenchymal interactive interface for barb patterning, and central pulp, which provides nutrition. Entering the resting phase, LRDCs, accompanying collar bulge epidermal label-retaining cells, descend to the apical dermal papilla. In the next cycle, these apical dermal papilla LRDCs are re-activated to become new pulp progenitor TA cells. In the growth phase, lower dermal sheath can generate dermal papilla and pulp. Transcriptome analyses identify marker genes and highlight molecular signaling associated with dermal specification. We compare the cyclic topological changes with those of the hair follicle, a convergently evolved follicle configuration. This work presents a model for analyzing homeostasis and tissue remodeling of mesenchymal progenitors.