Abstract: Hair loss, a multifactorial disorder characterized by follicular miniaturization and excessive shedding, significantly impairs psychological well-being and quality of life. Cyperus rotundus rhizome (CR), a traditional Chinese medicine used for various ailments, has not been evaluated for efficacy in treating hair loss. This study presents the first comprehensive assessment of the hair growth-promoting effects of ethanol extract from CR on mouse primary dermal papilla cells (MDPCs) and human immortalized hair DPCs (IHHDPCs), employing cell counting kit-8 (CCK-8), scratch assay, reverse transcription-quantitative polymerase chain reaction (RT-qPCR), and Western blot (WB). CR treatment activated the Wnt/β-Catenin signaling pathway by upregulating Wnt10b, increasing β-Catenin protein levels and promoting its nuclear translocation, while simultaneously downregulating transforming growth factor-beta 1 (TGF-β1), BMP4, and dickkopf-related protein 1 (DKK1) in MDPCs. These molecular changes enhanced cell proliferation and increased secretion of key growth factors—insulin-like growth factor 1 (IGF1), keratinocyte growth factor (KGF), and vascular endothelial growth factor (VEGF)—thereby stimulating hair growth and prolonging the anagen phase, which was confirmed in an ex vivo hair follicle (HF) organ culture model. Chromatographic analysis identified the petroleum ether fraction (CRP), enriched in sesquiterpenes, as the primary bioactive component. Both CR and CRP promoted IHHDPC proliferation, migration, and growth factor expression through activation of the Wnt/β-Catenin pathway, with CRP exhibiting superior bioactivity. Furthermore, both treatments stimulated HF cycling, increased follicular density, and upregulated Ki67 and β-Catenin expression in the dorsal skin of C57BL/6 mice. Collectively, these findings demonstrate that CR and CRP promote hair growth and modulate the hair cycle via enhancement of Wnt/β-Catenin signaling, providing a scientific basis for the potential clinical application of C. rotundus rhizomes in hair loss therapy and the development of related pharmaceuticals or cosmetics.