In male pattern hair loss or androgenetic alopecia, the hormone dihydrotestosterone (DHT) acts on the hair follicles of the scalp, causing the hairs to miniaturize and become smaller and finer. DHT is regulated by the enzyme 5 alpha reductase.
Finasteride acts by inhibiting 5 alpha reductase, and this decreases the DHT levels and therefore its miniaturization effects on the hair follicles.
Finasteride (propecia) is an effective treatment for androgenic aloecia or male pattern hair loss. In male pattern hair loss, there is slow progressive hair loss over time. Finasteride is able to maintain the hair and prevent further hair loss and is able to promote new hair growth.
Studies have shown that 9 in 10 individuals can maintain their hair or have new hair regrowth while on finesteride treatment. 
- Kaufman KD, Olsen EA, Whiting D, et al. Finasteride in the treatment of men with androgenetic alopecia. Finasteride Male Pattern Hair Loss Study Group. J Am Acad Dermatol. 1998;39(4 Pt 1):578-89.