Shear Genius uses a combination of rules from Project Runway and Top Chef, two other Bravo network shows.

There are two challenges in each episode. The first challenge, the Shortcut Challenge, is usually not for elimination, but in Episode 3 one competitor was cut after the Shortcut Challenge. The Shortcut Challenge ranks the contestants based on a judging factor, usually technical skills. The winning contestant(s) may receive some benefit in the second challenge.

The second challenge is the Elimination Challenge, which has each contestant style the hair on a real model or client given certain requirements or goals. After completing the hair, the model is dressed appropriately and a runway show, similar to Project Runway, is held for the four judges. After the show, the judges may ask questions of the contestants about their styling choices. The judges then confer among themselves and decide on the top and bottom styles. The top stylists are credited and a single winning stylist is selected; their picture is displayed on the Allure Wall of Fame for the remainder of the competition. The bottom stylists are then identified, and the worst stylist is sent home with the show's tagline "This is your final cut."

Both challenges were timed, and if additional materials were necessary, the contestants are given a limited budget for those supplies.