Although 1α,25-dihydroxyvitamin D₃ [1α,25(OH)₂D₃] is considered the most biologically active vitamin D₃ metabolite, the vitamin D₃ prohormone, 25-hydroxyvitamin D₃ [25(OH)D₃], is metabolized into other forms, including 24R,25-dihydroxyvitamin D₃ [24R,25(OH)₂D₃]. Herein we show that 24R,25(OH)₂D₃ is fundamental for osteoblastic differentiation of human mesenchymal stem cells (hMSCs). Our approach involved analyses of cell proliferation, alkaline phosphatase activity, and pro-osteogenic genes (collagen 1A1, osteocalcin, vitamin D receptor [VDR], vitamin D₃-hydroxylating enzymes [cytochrome P450 hydroxylases: CYP2R1, CYP27A1, CYP27B1 and CYP24A1]) and assessment of Ca²⁺ mineralization of extracellular matrix. 24R,25(OH)₂D₃ inhibited hMSC proliferation, decreased 1α-hydroxylase (CYP27B) expression, thereby reducing the ability of hMSCs to convert 25(OH)D₃ to 1α,25(OH)₂D₃, and promoted osteoblastic differentiation through increased alkaline phosphatase activity and Ca²⁺ mineralization. 24R,25(OH)₂D₃ decreased expression of the 1α,25(OH)₂D₃ receptor, VDR. 24R,25(OH)₂D₃ but not 1α,25(OH)₂D₃ induced Ca²⁺ mineralization dependent on the absence of the glucocorticoid analog, dexamethasone. To elucidate the mechanism(s) for dexamethasone-independent 1α,25(OH)₂D₃ inhibition/24R,25(OH)₂D₃ induction of Ca²⁺ mineralization, we demonstrated that 1α,25(OH)₂D₃ increased whereas 24R,25(OH)₂D₃ decreased reactive oxygen species (ROS) production. 25(OH)D₃ also decreased ROS production, potentially by conversion to 24R,25(OH)₂D₃. Upon inhibition of the vitamin D₃-metabolizing enzymes (cytochrome P450s), 25(OH)D₃ increased ROS production, potentially due to its known (low) affinity for VDR. We hypothesize that vitamin D₃ actions on osteoblastic differentiation involve a regulatory relationship between 24R,25(OH)₂D₃ and 1α,25(OH)₂D₃. These results implicate 24R,25(OH)₂D₃ as a key player during hMSC maturation and bone development and support the concept that 24R,25(OH)₂D₃ has a bioactive role in the vitamin D₃ endocrine system.