Although local synthesis of 1,25D has been postulated to regulate parameters of cell growth and differentiation in non-renal cells, the physiological role of 1,25D production in bone cells remains unclear. We used the technique of RNA interference to inhibit the mRNA encoding the enzyme responsible for 1,25D synthesis, 25-hydroxyvitamin D 1alpha-hydroxylase (CYP27B1). Human osteosarcoma (HOS) cells were transfected with siRNA for CYP27B1 or non-silencing RNA before being treated with 25D for 48h under normal growth conditions. De novo synthesis of 1,25D was measured in the media as well as mRNA levels for CYP27B1, osteocalcin (OCN) and 25-hydroxyvitamin D 24-hydroxylase (CYP24). We demonstrated that HOS cells express CYP27B1 mRNA, metabolize 25D and secrete detectable levels of de novo synthesized 1,25D. CYP27B1 mRNA silencing by RNAi, resulted in the suppression of 1,25D production and subsequent reduction of OCN and CYP24 mRNA expression. Our findings suggest that local 1,25D synthesis has paracrine effects in the bone microenvironment implying that vitamin D metabolism in human osteoblasts represents a physiologically important pathway, possibly regulating the maturation of osteoblasts.