The functions of dendritic cells (DCs) are tightly regulated such that protective immune responses are elicited and unwanted immune responses are prevented. 1α25-dihydroxyvitamin D3 (1α25(OH)2D3) has been identified as a major factor that inhibits the differentiation and maturation of DCs, an effect dependent upon its binding to the nuclear vitamin D receptor (VDR). Physiological control of 1α25(OH)2D3 levels is critically dependent upon 25-hydroxyvitamin D3-1α-hydroxylase (1αOHase), a mitochondrial cytochrome P450 enzyme that catalyzes the conversion of inactive precursor 25-hydroxyvitamin D3 (25(OH)D3) to the active metabolite 1α25(OH)2D3. Using a human monocyte-derived DC (moDC) model, we have examined the relationship between DC VDR expression and the impact of exposure to its ligand, 1α25(OH)2D3. We show for the first time that moDCs are able to synthesize 1α25(OH)2D3 in vitro as a consequence of increased 1αOHase expression. Following terminal differentiation induced by a diverse set of maturation stimuli, there is marked transcriptional up-regulation of 1αOHase leading to increased 1αOHase enzyme activity. Consistent with this finding is the observation that the development and function of moDCs is inhibited at physiological concentrations of the inactive metabolite 25(OH)D3. In contrast to 1αOHase, VDR expression is down-regulated as monocytes differentiate into immature DCs. Addition of 1α25(OH)2D3 to moDC cultures at different time points indicates that its inhibitory effects are greater in monocyte precursors than in immature DCs. In conclusion, differential regulation of endogenous 1α25(OH)2D3 ligand and its nuclear receptor appear to be important regulators of DC biology and represent potential targets for the manipulation of DC function.