Shaving the head is one of the rules the Buddha laid down for his monks and nuns. It is one of the key indicators of renunciation showing that a person has given up ordinary life and will live outside of social conventions.
Fortunately we can read about the exact situation where the Buddha made this rule. We find it in the section of the monks rules called the Culla Vagga:
Now at that time the group of six monks wore their hair long. People looked down upon, criticised, spread it about, saying: “Like householders who enjoy pleasures of the senses.”
Monks heard these people who were … spreading it about. Then these monks told this matter to the Lord. Then the Lord on this occasion, in this connection, having had the Order of monks convened, questioned the monks, saying: “Is it true, as is said, monks, that the group of six monks wore their hair long?”
“It is true, Lord.” The Awakened One, the Lord rebuked them, saying:
“It is not fitting, monks, in these foolish men, it is not becoming, it is not proper, it is unworthy of a recluse, it is not allowable, it is not to be done. How, monks, can these foolish men wear their hair long? It is not, monks, for pleasing those who are not yet pleased, nor for increasing the number of those who are pleased, but it is, monks, for displeasing those who are not yet pleased as well as those who are pleased, and for causing wavering in some.”
Having rebuked them, having given reasoned talk, he addressed the monks, saying: “Monks, long hair should not be worn. Whoever should wear it long, there is an offence of wrong-doing. I allow it to be of a two months’ growth or two finger-breadths in length.”
At the time people clearly understood that renunciants should not have long hair like ordinary people.
When the Buddha talked about people becoming monk, it was always by shaving off their hair and beards and putting on the yellow robes.

Another common practice at that time was plucking out all of the head hair instead of shaving it. This was also not allowed by the Buddha.
For what little the hair could be grown, the Buddha also disallowed styling the hair using oil or wax, even just using the hand.
1. The Book of the Discipline translated by with supplementary translation by

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