Newborn children may develop a telogen effluvium form of hair loss. Normally when embryos develop in the womb the skin develops hair follicles that all run through one complete cycle of growth by about eight months. The first hair produced by neonatal hair follicles is called lanugo hair. It is very fine hair and it is not pigmented. After eight months of gestation the hair follicles enter a telogen phase and shed the first hair whilst still in the womb. Then the hair follicles gradually return to an active growth phase such that at birth the newborn can have some pigmented scalp hair.

However, for some embryos the normal pattern of events does not run according to plan. Instead of shedding their first hair in utero, the embryo retains the hair until birth. After birth this first hair is gradually lost but it is not immediately replaced. Within the first six months of life the hair of a newborn may be very thin. Gradually the hair follicles organize themselves and strong terminal hair is produced.

Hair loss may also occur in babies due to the unusual nature of hair growth in new borns. In adult humans hair follicle growth and rest cycles occur in a mosaic pattern, but in new borns the hair growth cycle is similar to that seen in rodents (see the hair biology section) and the hair growth and rest moves in an anagen wave from the front of the scalp to the back. There can be a delay between the loss of hair in the first wave and growth of new hair in the second wave leading to alopecia most frequently at the back of the scalp. Gradually hair growth changes to a mosaic pattern and the alopecia gradually disappears.

In addition to these changes in hair follicle development and cycling in new borns, the physical stress of birth may be a considerable shock to the hair follicles. The hair follicles may enter a resting telogen state in response to the stress of birth and as a result a lot of hair may be shed during the first month of life.