Fig. 8. An expanded model for follicle formation. Step 1: signaling by hh from the terminal filament (red) creates a somatic stem cell niche at the region 2a/2b boundary, conferring stem cell characteristics on 2 somatic cells (green). Step 2: somatic stem cells produce undifferentiated mesenchymal cells (green) that surround the germline cyst and compress it into a lens shape in region 2b Step 3: EGFR signaling from the germline (yellow) provides a continuous proliferation signal to somatic cells. Step 4: Dl signaling (blue) induces somatic cells between adjacent cysts in region 2b to initiate polar cell differentiation (purple stippling). Step 5: Somatic cells that physically contact only one germline cyst differentiate as cuboidal epithelial cells (beige). Step 6: differentiating polar cells provide a ‘booster’ proliferative signal, while recruiting remaining somatic cells in region 2b to form stalks (straight purple arrows); these could be distinct signals. In region 3 lateral inhibition (curved purple arrows) eventually refines the polar cell number to two. Step 7: differentiating stalk cells (orange stippling) converge and extend (arrows) between polar cells of adjacent cysts to form an interfollicular stalk. Steps 2, 3, 6 and 7 require discrete da⁺ functions.