1,25(OH)2D regulates a number of cellular events which contribute to its ability to stimulate differentiation of the keratinocyte. 1,25(OH)2D raises the intracellular calcium (Cai) level in part by increasing the expression of the calcium receptor (CaR). This sensitizes the cell to extracellular calcium, triggering the signaling pathway coupled to the CaR, which results in a rise in Cai. 1,25(OH)2D induces the family of phospholipases C (PLC). These enzymes mediate the hydrolysis of phosphatidyl inositol bisphosphate (PIP2) to form inositol tris phosphate (IP3) and diacylglycerol (DG), which stimulate calcium release from intracellular stores and activate protein kinases C (PKC), respectively. The CaR and other G protein coupled receptors signal through PLC-beta, whereas tyrosine kinase growth factor receptors such as the EGF receptor signal through PLC-gamma. Calcium and PKC regulate the expression of genes in part by controlling the levels and activity of AP-1 transcription factors. 1,25(OH)2D also directly induces structural genes such as involucrin, a substrate for transglutaminase, which crosslinks it to other substrates to form the cornified envelope. 1,25(OH)2D regulates gene expression by activating the vitamin D receptor (VDR), a transcription factor, which, in combination with the retinoid X receptor (RXR) or retinoid A receptor (RAR), binds to its vitamin D response elements (VDRE) in the promoters of genes whose expression it regulates. The VDR also binds to one of two coactivator complexes, Mediator/DRIP (VDR interacting proteins) or p160/SRC (steroid hormone receptor complex), complexes which link the VDR to the RNA polymerase complex. We have recently discovered that the binding of VDR to these complexes is sequential. Binding to Mediator/DRIP occurs in the undifferentiated keratinocyte, but as the cell differentiates, DRIP(205) (the key protein of the DRIP complex binding to the VDR) levels fall, and p160/SRC binding takes over. We hypothesize that this sequential replacement of Mediator/DRIP by p160/SRC is critical for differentiation. Squamous cell carcinomas (SCC) fail to respond to the prodifferentiating actions of 1,25(OH)2D. These cells have normal levels of VDR and normal binding of VDR to VDREs. However, they fail to down-regulate DRIP(205) such that the p160/SRC complex fails to bind to VDR. This lack of sequential binding of these coactivator complexes to the VDR, we believe, maintains the cell in a state of continued proliferation and blocks the ability of 1,25(OH)2D to induce the expression of genes required for the differentiation process.