Laurence Meyer, a dermatologist at the University of Utah, offers this explanation:
The pigment in hair, as well as in the skin, is called melanin. There are two types of melanin: eumelanin, which is dark brown or black, and pheomelanin, which is reddish yellow. Both are made by a type of cell called a melanocyte that resides in the hair bulb and along the bottom of the outer layer of skin, or epidermis. The melanocytes pass this pigment to adjoining epidermal cells called keratinocytes, which produce the protein keratin¿hair's chief component. When the keratinocytes undergo their scheduled death, they retain the melanin. Thus, the pigment that is visible in the hair and in the skin lies in these dead keratinocyte bodies.
The control of this pigment production is complex, and somewhat different for skin and hair, but there are clear genetic factors. One is the recently identified MC1R gene. Alleles of this gene are associated with red hair in humans, cows and many other species. (Pigment can also tie in with the hair cycle¿that is, the process of a new hair growing and stopping at a preset length¿as seen in animals such as an agouti mouse, where the tip of the hair differs in color from the shaft.)
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Gray hair, then, is simply hair with less melanin, and white hair has no melanin at all. Genes control this lack of deposition of melanin, too. In some families, many members' hair turns white in their 20s. Generally speaking, among Caucasians 50 percent are 50 percent gray by age 50. There is, however, wide variation. This number differs for other ethnic groups, again demonstrating the effect of genetic control.
Exactly how hair loses its pigment remains unclear. In the early stages of graying, the melanocytes are still present but inactive. Later on they seem to decrease in number. In general, this type of graying is not associated with any disease, although it can be associated with some autoimmune processes. But graying in a young adult is not itself a sign of any health problem.