Hair dyeing does not inhibit hair growth, but it may cause hair loss by damaging the hair that is color treated. Hair beneath the scalp that has not yet emerged cannot be reached by hair dye and thus hair dye cannot fundamentally cause hair loss, but hair shedding can increase with hair dyeing.

First, the manipulation of the hair shafts as part of the rubbing and combing associated with the dyeing procedure can loosen hairs in telogen causing increased shedding.

Second, the hair dye contains both ammonia and hydrogen peroxide, which also loosens telogen hairs.

Third, hair dye can physically weaken hair shafts increasing breakage-caused hair loss.

The most common cause of hair loss related to hair dyeing is physical weakening of the hair shaft by disruption of the protein backbone. Hair dyes that lighten hair from its natural color are the most disruptive as they contain high volumes of peroxide. Peroxide is necessary to remove the eumelanin pigments from the hair shaft and replace them with blonde colors. Many individuals who dye their hair from brunette to blonde will notice shortening of the hair or the need for less frequent haircuts. This is due to breakage at the distal end of the hair shafts, which are the oldest and have accumulated the most cuticle disruption, a phenomenon known as weathering.

If the hair has been bleached to a very light color from a very dark color, the hair can be weakened to the point of breakage at the point where it exists on the scalp, resulting in the appearance of alopecia. The alopecia is temporary, of course, until the hair regrows. Fortunately, the treatment recommendation is simple. The patient should no longer lighten their hair color and pick another darker shade. Thus, hair dyeing can cause temporary hair loss due to breakage.

Source: http://dermatologytimes.modernmedicine.com