Skin cancer is the most common cancer afflicting humans. These cancers include melanomas and 2 types of malignant keratinocytes: basal-cell carcinomas (BCC) and squamous-cell carcinomas (SCC). UV light exposure is linked to the incidence of these cancers. On the other hand, the skin is the major source of vitamin D-3 (cholecalciferol) and UV light is critical for its formation. Keratinocytes can convert vitamin D-3 to its hormonal form, 1,25 dihydroxyvitamin D(3) [1,25(OH)(2)D(3)] (calcitriol). 1,25(OH)(2)D(3) in turn stimulates the differentiation of keratinocytes, raising the hope that 1,25(OH)(2)D(3) may prevent the development of malignancies in these cells. We identified a number of mechanisms by which 1,25(OH)(2)D(3) regulates the differentiation of keratinocytes and explored where this regulation breaks down in SCCs. 1,25(OH)(2)D(3) regulates gene expression by activating the vitamin D receptor (VDR). When activated, the VDR binds to one of two coactivator complexes: DRIP or p160/SRC. Binding to DRIP occurs in the undifferentiated keratinocyte, but, as the cell differentiates, DRIP(205) levels fall and p160/SRC binding takes over as SRC3 expression increases. SCCs fail to respond to the prodifferentiating actions of 1,25(OH)(2)D(3). These cells have normal levels of VDR and normal binding of VDR to vitamin D response elements. However, they overexpress DRIP(205) such that the p160/SRC complex is blocked from binding to VDR. We hypothesize that failure of 1,25(OH)(2)D(3) to induce differentiation in SCCs lies at least in part with its failure to induce the replacement of the DRIP complex with the SRC complex in the promoters of genes required for differentiation.