Adult stem cells are required for epithelial tissue homeostasis, but the mechanisms through which these cells are activated and maintain quiescence are not well understood. Postnatal epidermis and hair follicles are accessible and well-characterized systems in which to study adult stem cells. Secreted signaling molecule FGF18 is required for hair follicle stem cell quiescence, but the mechanisms that regulate Fgf18 expression and maintain quiescence are incompletely characterized. We find that transcription factor KLF4 is expressed in quiescent hair follicle stem cells and excluded from proliferating hair follicle cells. KLF4 is required for epidermal barrier development, but its roles in postnatal life remain understudied. To determine the functions of KLF4 in postnatal epidermis and hair follicles, we used mouse models that permit inducible deletion of Klf4 in these distinct compartments. Pan-epidermal deletion of Klf4 caused a barrier defect, increased proliferation, inflammation, aberrant differentiation, and premature entry of hair follicles into a new growth phase. Klf4 deletion throughout the entire hair follicle showed that KLF4 is required in the hair follicle to prevent proliferation. Interestingly, KLF4 expression in the inner hair follicle bulge was sufficient to inhibit stem cell proliferation. Fgf18 expression was significantly reduced in Klf4-mutant hair follicle stem cells compared to controls, indicating that Fgf18 is a direct or indirect target of KLF4. Together, these data show KLF4 maintains hair follicle stem cell quiescence by activating target genes that inhibit hair follicle stem cell proliferation, including Fgf18, and identify novel functions for KLF4 in an adult stem cell compartment. This work has implications for regenerative medicine and adult stem cell biology.