The active form of vitamin D (1,25-dihydroxyvitamin D(3), 1,25[OH](2)D(3)) has well-established effects on bone metabolism and mineral homeostasis. However, recently it has become clear that 1,25(OH)(2)D(3) has potent antiproliferative and immunomodulatory actions that are not immediately linked to its role as a skeletal regulator. Both the nuclear receptor for 1,25(OH)(2)D(3) (vitamin D receptor, VDR) and the vitamin D-activating enzyme 1alpha-hydroxylase are expressed in a wide variety of nonclassic tissues, highlighting the potential for local autocrine-paracrine responses rather than traditional endocrine effects. Prominent among the tissues that express 1alpha-hydroxylase is the placenta-decidua, and this has raised important questions concerning the potential role of locally generated 1,25(OH)(2)D(3) as a modulator of fetal-placental development and function. When bound to the VDR, 1,25(OH)(2)D(3) regulates key target genes associated with implantation, such as HOXA10, whereas the potent immunosuppressive effects of 1,25(OH)(2)D(3) suggest a role in implantation tolerance. These observations are further supported by data from our group showing increased expression of 1alpha-hydroxylase and VDR in first-trimester trophoblast and decidua from human pregnancies. Studies by other groups have reported abnormal expression of 1alpha-hydroxylase in preeclamptic pregnancies, revealing a potential role for 1,25(OH)(2)D(3) as a regulator of placentation. The effect of vitamin D on reproduction has been further endorsed by murine gene knockout models for 1alpha-hydroxylase and VDR, both of which are infertile. These observations and others are discussed in this article in which we postulate an active role for 1,25(OH)(2)D(3) in placenta-decidua. In particular, we describe how induction of the vitamin D-activating enzyme 1alpha-hydroxylase in early gestation might provide a mechanism by which environmental or dietary vitamin D can influence fetal-placental development.