A current controversial question related to vitamin D supplementation is what level of serum 25(OH)D3 (25D) is required to reduce the incidence of osteoporotic fractures. The answer is unclear, in part, because the debate has been limited to the the role of vitamin D to promote intestinal calcium absorption and lower serum parathyroid hormone levels. Little consideration has been given to the role for vitamin D synthesis and activity directly in bone itself. While minimum 25D levels of 20nmol/L are required for sufficient intestinal calcium absorption to prevent elevated parathyroid hormome (PTH) and osteomalacia, the mechanistic details of how higher 25D levels, well beyond that required for optimal calcium absorption, are able to prevent osteoporosis is unclear. We have previously shown a dose-response relationship between 25D levels and bone mineral content in rats, which peaks at least 80nmol/L, consistent with clinical and fracture data. We propose that this level of 25D, which is well above that which suppresses PTH, is required for the synthesis of adequate levels of active 1,25(OH)2D3 in various bone cells. Our studies utilising in vitro and conditional knockout mice demonstrate that local synthesis of 25D to active 1,25(OH)2D3 via the CYP27B1 enzyme regulates processes of mineralization, which is dependent on the presence the of the vitamin D receptor (VDR). Furthermore, while transgenic over-expression of VDR in osteoblasts exacerbates bone catabolism in the presence of high circulating 1,25(OH)2D3 levels, the over-expression of CYP27B1 in osteoblasts promotes anabolic activities improving bone mineral volume. While questions remain regarding the biological importance of vitamin D activity within the bone, a clear understanding of these mechanisms may elucidate the roles for vitamin D to prevent osteoporosis, and this understanding will lead to evidence based recommendations for vitamin D supplementation to reduce the risk of fractures.