The vitamin D receptor (VDR) and its ligand 1,25-dihydroxyvitamin D₃ are required for normal keratinocyte differentiation. Both the epidermis and the hair follicle are disrupted in VDR null mice. Hairless (Hr), a presumptive transcription factor with no known ligand, when mutated disrupts hair follicle cycling similar to that of VDR mutations. Hr like VDR is found in the nuclei of keratinocytes in both the epidermis and hair follicle. To investigate the potential interaction between Hr and VDR on keratinocyte differentiation, we examined the effect of Hr expression on the vitamin D responsive genes in normal human keratinocytes. Inhibition of Hr expression in keratinocytes potentiated the induction of vitamin D responsive genes including involucrin, transglutaminase, phospholipase C-1 and 25-hydroxyvitamin D-24-hydroxylase (24-hydroxylase) by 1,25-dihydroxyvitamin D₃. Overexpression of Hr in human keratinocytes suppressed the induction of these vitamin D responsive genes by 1,25-dihydroxyvitamin D₃. Coimmunoprecipitation, DNA mobility shift assays and chromatin immunoprecipitation revealed that Hr binds to VDR in human keratinocytes. Hr binding to the VDR was eliminated by 1,25-dihydroxyvitamin D₃ which recruited the coactivator DRIP205 to the VDR/VDRE complex. These data indicate that Hr functions as a corepressor of VDR to block 1,25-dihydroxyvitamin D₃ action on keratinocytes.