The local synthesis of active vitamin D (1,25D) by the enzyme CYP27B1 within osteoblasts has been previously shown to act in an autocrine manner to regulate cell proliferation and differentiation. While expression of Cyp27b1 occurs at all stages of osteoblast differentiation, the greatest expression occurs in the most mature cells which are transitioning to osteocytes. Thus, in the current study we utilized the mouse osteocyte-like cell lines MLO-A5 and MLO-Y4 to demonstrate that osteocytic cells express Cyp27b1, and convert 25D to 1,25D with resultant modulation of target gene expression. A plasmid vector has also been created in which transcription of the human Cyp27b1 sequence is driven by the 3.6kb human osteocalcin promoter (OSCyp27b1), limiting transgene expression to osteoblasts and osteocytes. Transfection of MLO-Y4 cells with the OSCyp27b1 plasmid yielded high levels of human Cyp27b1 mRNA, and increased conversion of 25D to 1,25D leading to repression of osteocalcin, PHEX and ANK gene expression. The OSCyp27b1 plasmid was utilized to generate a novel transgenic mouse with increased Cyp27b1 expression in mature osteoblasts/ osteocytes. In adult (20wk) mice, BV/TV in the lumbar vertebra is 10.8% greater in OSCyp27b1 males than wild-type littermates (p<0.05, n=12), and 10.1% greater in females (p=0.08, n=15). Female OSCyp27b1 mice lose less femoral BV/TV than WTs with age, with BV/TV strongly correlated with bone formation rate (R2=0.67, p=0.01). Analysis of gene expression on RNA isolated from OSCyp27b1 tibia indicates increased expression of osteocyte markers including Dmp-1 (p<0.05, n=4). Taken together, these data suggest that local synthesis of 1,25D within osteocytes, in addition to osteoblasts, is capable of mediating the expression of genes associated with mineralisation and increased bone mass.