Finasteride is a 5α-reductase inhibitor, and therefore an antiandrogen. It works by decreasing the production of dihydrotestosterone (DHT) by about 70%, including in the prostate gland and the scalp.
Taking finasteride leads to a reduction in scalp and serum DHT levels; by lowering scalp levels of DHT, finasteride can maintain or increase the amount of terminal hairs in the anagen phase by inhibiting and sometimes reversing miniaturization of the hair follicle. Finasteride is most effective on the vertex but can reduce hair loss in all areas of the scalp.