Although 1α,25-dihydroxyvitamin D3 [1α,25(OH)2D3] is considered the most biologically active vitamin D3 metabolite, the vitamin D3 prohormone, 25-hydroxyvitamin D3 [25(OH)D3], is metabolized into other forms, including 24R,25-dihydroxyvitamin D3 [24R,25(OH)2D3]. Herein we show that 24R,25(OH)2D3 is fundamental for osteoblastic differentiation of human mesenchymal stem cells (hMSCs). Our approach involved analyses of cell proliferation, alkaline phosphatase activity, and pro-osteogenic genes (collagen 1A1, osteocalcin, vitamin D receptor [VDR], vitamin D3-hydroxylating enzymes [cytochrome P450 hydroxylases: CYP2R1, CYP27A1, CYP27B1 and CYP24A1]) and assessment of Ca(2+) mineralization of extracellular matrix. 24R,25(OH)2D3 inhibited hMSC proliferation, decreased 1α-hydroxylase (CYP27B) expression, thereby reducing the ability of hMSCs to convert 25(OH)D3 to 1α,25(OH)2D3, and promoted osteoblastic differentiation through increased alkaline phosphatase activity and Ca(2+) mineralization. 24R,25(OH)2D3 decreased expression of the 1α,25(OH)2D3 receptor, VDR. 24R,25(OH)2D3 but not 1α,25(OH)2D3 induced Ca(2+) mineralization dependent on the absence of the glucocorticoid analog, dexamethasone. To elucidate the mechanism(s) for dexamethasone-independent 1α,25(OH)2D3 inhibition/24R,25(OH)2D3 induction of Ca(2+) mineralization, we demonstrated that 1α,25(OH)2D3 increased whereas 24R,25(OH)2D3 decreased reactive oxygen species (ROS) production. 25(OH)D3 also decreased ROS production, potentially by conversion to 24R,25(OH)2D3. Upon inhibition of the vitamin D3-metabolizing enzymes (cytochrome P450s), 25(OH)D3 increased ROS production, potentially due to its known (low) affinity for VDR. We hypothesize that vitamin D3 actions on osteoblastic differentiation involve a regulatory relationship between 24R,25(OH)2D3 and 1α,25(OH)2D3. These results implicate 24R,25(OH)2D3 as a key player during hMSC maturation and bone development and support the concept that 24R,25(OH)2D3 has a bioactive role in the vitamin D3 endocrine system.