A wet and dry towel dispenser contains and dispenses both dry towels and wet towels (also referred to as towelettes or wipes). The dispenser includes coaxially located compartments for containing the dry towels and wet towels, preferably in a nested arrangement to use space most efficiently within the dispenser. One preferred embodiment of the dispenser has a substantially cylindrical shape and a removable cover on one end to allow the towels to be loaded into the respective compartments.