The agency has recruited Jo Taylor to spearhead the five-strong division, taking the title of associate director and head of beauty.
Simon Hackett, associate director of Pegasus, said Taylor would use her experience to develop the new division and to 'chase the big names'.
He added: 'Having Jo on board will give us a great advantage. She has the knowledge and experience of working with big consumer brands so it will definitely be a plus when we are looking to win new business.'
Pegasus' current beauty clients include skin care brand Avene and a new men's grooming range from Dead Sea Healthcare, but by bringing Taylor on board the agency hopes to expand its client list significantly.
'Jo has given us the confidence to approach the high street brands that we wouldn't have approached otherwise,' said Hackett.
However, one rival agency boss suggested that the decision to focus on the beauty division in these tough economic times could be a risky move.
Spink PR director Justin Wilkes said: 'There is only so much growth in the beauty industry at the moment. With the credit crunch, luxuries are the first to go, meaning that there could be a possibility of marketing and PR budgets being cut.'
But he conceded that Taylor 'will know the ins and outs of how beauty companies work and will be able to extend this knowledge throughout the whole agency'.
Taylor started the new role at Pegasus this week. She previously spent six years within the Virgin Group and also worked as head of communications at clothing brand Fat Face.
She has also worked in The Body Shop's corporate communications team.
Pegasus recently brought in former Lexis PR and Chameleon PR staffer Stuart Hehir as its new creative director.