Similar to the discovery of the VDR in nonclassical target tissues, the expression of 1 alpha-hydroxylase activity in immune cells, in the hematopoietic system, in tissues at early stages in development, in keratinocytes, and in the liver raises numerous questions about the physiological role of endogenous 1,25(OH)2D3 production. Extrarenal sources are regulated independently from the renal enzyme. The tight control of nonrenal 1 alpha-hydroxylase by physiological levels of calcitriol under normal circumstances and the total absence of regulation in several pathological states are consistent with 1,25(OH)2D3 synthesis having a local role rather than contributing to systemic calcitriol homeostasis. The simultaneous expression of vitamin D receptors, constitutive 1 alpha-hydroxylase, and inducible 24-hydroxylase activity in the same cell or in cells of the nearby environment suggests that they constitute a means for an in situ regulation of the response to vitamin D. Experimental evidence indicates that tissue-specific vitamin D microendocrine systems participate in transmural calcium transport, in normalizing serum calcitriol in chronic renal failure, in the control of hematopoiesis, in the modulation of the immune response, and in cellular growth and differentiation in a variety of cell types. A complete understanding of the physiological relevance of extrarenal calcitriol synthesis awaits cloning of the 1 alpha-hydroxylase and characterization of the molecular mechanisms modulating its expression.