20,23-Dihydroxyvitamin D(3) [20,23(OH)(2)D(3)] is a biologically active metabolite produced by the action of cytochrome P450scc (CYP11A1) on vitamin D(3). It inhibits keratinocyte proliferation, stimulates differentiation, and inhibits nuclear factor-kappaB activity, working as a vitamin D receptor agonist. We have tested the ability of purified mouse 25-hydroxyvitamin D(3) 1alpha-hydroxylase (CYP27B1) to add a 1alpha-hydroxyl group to this vitamin D analog and determined whether this altered its biological activity. 20,23(OH)(2)D(3) incorporated into phospholipid vesicles was converted to a single product by CYP27B1, confirmed to be 1alpha,20,23-trihydroxyvitamin D(3) [1,20,23(OH)(3)D(3)] by mass spectrometry and NMR. The 20,23(OH)(2)D(3) was a relatively poor substrate for CYP27B1 compared with the normal substrate, 25-hydroxyvitamin D(3), displaying a 5-fold higher K(m) and 8-fold lower k(cat) value. Both 20,23(OH)(2)D(3) and 1,20,23(OH)(3)D(3) decreased neonatal human epidermal keratinocyte proliferation, showing significant effects at a lower concentration (0.1 nM) than that seen for 1alpha,25-dihydroxyvitamin D(3) [1,25(OH)(2)D(3)] at 24 h of treatment. Both compounds also decreased cell biomass relative to that of control cells, measured by staining with sulforhodamine B. They caused little stimulation of the expression of the vitamin D receptor at the mRNA level compared with the 30-fold induction observed with the same concentration (100 nM) of 1,25(OH)(2)D(3) at 24 h. Addition of a 1alpha-hydroxyl group to 20,23(OH)(2)D(3) greatly enhanced its ability to stimulate the expression of the CYP24 gene but not to the extent seen with 1,25(OH)(2)D(3). This study shows that purified CYP27B1 can add a 1alpha-hydroxyl group to 20,23(OH)(2)D(3) with the product showing altered biological activity, especially for the stimulation of CYP24 gene expression.