Vitamin D has a pivotal role in a many biological processes, including the maintenance of calcium homeostasis, cell differentiation and proliferation. Most of these actions are mediated by transcriptional regulation of target genes through vitamin D receptor (VDR), a member the steroid/thyroid hormone receptor superfamily. Thus, it is important to understand vitamin D biosynthesis into an active form that regulates VDR transcriptional functions. The active form of vitamin D, 1α,25(OH)(2)D(3), derived by vitamin D3 1alpha hydroxylase, 1α(OH)ase in renal proximal tubule cells is a ligand for VDR. We have identified the 1α(OH)ase gene, which uses a novel expression cloning method derived from VDR deficient mice that have excess amounts of active vitamin D3 in the serum. Identification of 1α(OH)ase gene had lead us to understand not only the biological significance of active vitamin D3 synthesis, but also a novel mechanism of VDR-mediated transcriptional regulation. The gene expression of 1α(OH)ase is positively and negatively regulated by parathyroid hormone (PTH) and active vitamin D3 respectively. In this review, we describe switching between positive and negative transcriptional modulation by the VDR, together with recent findings on the mechanisms of VDR-mediated epigenetic regulation in the 1α(OH)ase gene.