The skin fulfills an important role in the vitamin D photo‐endocrine system. Epidermis is not only the site of vitamin D₃ photoproduction. In addition, epidermal keratinocytes contain the vitamin D receptor (VDR) and possess 25‐hydroxylase and 1α‐hydroxylase activity indicating that all components of the vitamin D system are present. We investigated whether these components cooperate in inducing vitamin D activity upon treatment with physiological UVB doses. Upon irradiation, 24‐hydroxylase mRNA was induced in keratinocytes pretreated with a sterol Δ⁷‐reductase inhibitor (BM15766) whereby the 7‐dehydrocholesterol content increased by 300‐fold. Transfection experiments with a vitamin D response element containing construct confirmed VDR‐dependent gene activation. Furthermore, the UVB‐dependent induction of 24‐hydroxylase was blocked by the cytochrome‐P450 inhibitor ketoconazole. The 24‐hydroxylase inducing photoproduct was transferable to unirradiated keratinocytes by medium and cellular homogenates of UVB‐irradiated, BM15766‐pretreated cells and was identified as 1,25‐dihydroxyvitamin D₃ [1,25(OH)₂D₃] by high‐performance liquid chromatography with tandem mass spectrometric detection. Addition of vitamin D binding protein blunted UVB‐induced 24‐hydroxylase suggesting the possibility of a paracrine or autocrine role for 1,25(OH)₂D₃. In conclusion, epidermal keratinocytes can produce vitamin D₃, convert it to 1,25(OH)₂D₃ and respond to it upon UVB irradiation in the absence of exogenous 7‐dehydrocholesterol and therefore contain a unique and complete photo‐endocrine vitamin D system. J. Cell. Biochem. 98: 81–92, 2006. © 2005 Wiley‐Liss, Inc.