Cultured normal human pulmonary alveolar macrophages and peripheral blood monocyte-derived macrophages were studied for their capacity to metabolize [3H]25-hydroxyvitamin D3 (25OHD3). Incubation of macrophages with bacterial lipopolysaccharide (LPS) resulted in the conversion of [3H]25OHD3 to a more polar vitamin D3 metabolite (up to 15 pmol/10(6) cells). Untreated macrophages did not synthesize this metabolite. Several findings suggested that the metabolite was the biologically active form of vitamin D3, namely 1,25-dihydroxyvitamin D3 [1,25-(OH)2D3]. (1) The metabolite comigrated with chemically synthesized 1,25-(OH)2D3 on four different high performance liquid chromatographic systems. (2) The metabolite had the same affinity for the chick intestinal 1,25-(OH)2D3 receptor as authentic 1,25-(OH)2D3. (3) The biological activity of the macrophage metabolite in vivo (stimulation of intestinal calcium absorption and bone calcium mobilization in rachitic chicks) was identical to the activity of chemically synthesized 1,25-(OH)2D3. The LPS-stimulated synthesis of the 1,25-(OH)2D3-like compound by macrophages was dose dependent in a linear fashion; a half-maximal response was typically found with 100-200 ng LPS/10(6) cells. Polymyxin B abolished the effects of LPS on 25OHD3 metabolism in macrophages. Our data suggest that LPS-stimulated macrophages can modulate, on a local level, the function of 1,25-(OH)2D3-responsive cells by releasing the 1,25-(OH)2D3-like metabolite.