It has been shown that mammalian cytochrome P450scc can metabolize vitamin D3 to 20-hydroxyvitamin D3 (20(OH)D3) and 20,22(OH)2D3. To define the biological significance of this pathway, we tested the effects of 20(OH)D3 on the differentiation program of keratinocytes and on the expression of enzymes engaged in vitamin D3 metabolism. Immortalized HaCaT and adult human epidermal keratinocytes were used as a model and the effects of 20(OH)D3 were compared with those of 25(OH)D3 and 1,25(OH)2D3. 20(OH)D3 inhibited proliferation and caused G2/M arrest. 20(OH)D3 stimulated involucrin and inhibited cytokeratin 14 expression. The potency of 20(OH)D3 was comparable to that of 1,25(OH)2D3. 20(OH)D3 decreased the expression of cytochrome P450 enzyme (CYP)27A1 and CYP27B1, however, having only slight effect on CYP24. The effect of 20(OH)D3 was dependent on the vitamin D receptor (VDR). As shown by electrophoretic mobility shift assay, 20(OH)D3 stimulated the binding of nuclear proteins to the VDRE. Transfection of cells with VDR-specific siRNA decreased 20(OH)D3-stimulated transcriptional activity of the VDRE promoter and the expression of involucrin and CYP24 mRNA. Therefore, the above studies identify 20(OH)D3 as a biologically active secosteroid that induces keratinocyte differentiation. These data imply that the previously unreported pathway of vitamin D3 metabolism by P450scc may have wider biological implications depending, for example, on the extent of adrenal gland or cutaneous metabolism.