Keratinocyte differentiation requires the sequential regulation of gene expression. We have explored the role of 1,25(OH)(2)D-3 and its receptor (VDR) in this process. VDR sequentially binds to coactivator complexes such as Vitamin D receptor interacting protein (DRIP) and steroid receptor coactivator (SRC) during differentiation. Different genes respond differently to the VDR/coactivator complexes as determined by knockdown studies. The binding of DRIP205 and SRC to VDR is ligand (i.e. 1,25(OH)(2)D-3) dependent. LXXLL motifs in these coactivators are critical for this binding; however, the affinity for VDR of the different LXXLL motifs in these coactivators varies. Hairless is an inhibitor of 1,25(OH)(2)D-3 dependent gene transcription. A phi XX phi phi motif in hairless is crucial for hairless binding to VDR, and its binding is ligand independent. 1,25(OH)(2)D-3 displaces hairless and recruits the coactivators to VDREs. Hsp90 and p23 are chaperone proteins recruited to the DRIP/VDR complex, where they block the binding of the complex to VDREs and block 1,25(OH)(2)D-3 stimulated transcription. Thus four mechanisms explain the ability of 1,25(OH)(2)D-3 to sequentially regulate gene transcription during differentiation: changes in coregulator levels, their differential binding to VDR, differential gene responsiveness to the VDR/coregulator complexes, and chaperone proteins facilitating the cycling of VDR/coregulator complexes on and off the VDREs. Published by Elsevier Ltd.