1 alpha,25-Dihydroxyvitamin D3 [1 alpha,25(OH)2D3], the active form of vitamin D3, stimulates intestinal calcium absorption and osteoclastic bone resorption, resulting in the elevation of plasma calcium. Recent studies have revealed that 1 alpha,25(OH)2D3 also promotes differentiation of various cells such as myeloid leukemia cells, lymphocytes, macrophages and skin keratinocytes. The target cells of 1 alpha,25(OH)2D3 possess 1 alpha,25(OH)2D3 receptors (VDR) which belong to the steroid thyroid retinoic acid receptor gene family. The complex of VDR and 1 alpha,25(OH)2D3 binds to vitamin D3-responsive elements (VDRE) present in the promoter region of target genes of 1 alpha,25(OH)2D3. In bone, osteoblasts possess VDR and synthesize several proteins, such as BGP, osteopontin and the third component of complement (C3), in response to 1 alpha, 25(OH)2D3. 1 alpha, 25(OH)2D3 is involved in the differentiation of osteoclast progenitors into mature osteoclasts directly and also by an indirect mechanism involving some proteins produced by osteoblasts. In this review article, we show the mode of action and the biological function of 1 alpha, 25(OH)2D3.