Quiescent adult stem cells reside in specialized niches where they become activated to proliferate and differentiate during tissue homeostasis and injury. How stem cell quiescence is governed is poorly understood. We report here that NFATc1 is preferentially expressed by hair follicle stem cells in their niche, where its expression is activated by BMP signaling upstream and it acts downstream to transcriptionally repress CDK4 and maintain stem cell quiescence. As stem cells become activated during hair growth, NFATc1 is downregulated, relieving CDK4 repression and activating proliferation. When calcineurin/NFATc1 signaling is suppressed, pharmacologically or via complete or conditional NFATc1 gene ablation, stem cells are activated prematurely, resulting in precocious follicular growth. Our findings may explain why patients receiving cyclosporine A for immunosuppressive therapy display excessive hair growth, and unveil a functional role for calcium-NFATc1-CDK4 circuitry in governing stem cell quiescence.