Squamous carcinoma cells (SCC) fail to differentiate under conditions that are favorable for the growth and differentiation of normal human keratinocytes. Human keratinocytes differentiate from a highly proliferative basal cell to a terminally differentiated cornified cell in culture in the presence of physiological levels of extracellular calcium. 1,25-Dihydroxyvitamin D (1,25[OH]2D3) potentiates this process. Previous studies have shown that the differentiation process in keratinocytes is associated with increased expression of the genes for involucrin and transglutaminase, the products of which participate in cornified envelope formation. The mRNA for involucrin and transglutaminase was not detected in the SCC lines studied (viz. SCC4, 12B2, 12F2, A431, and HACAT) when they were grown in serum free medium. Addition of at least 2% fetal bovine serum for 48 h triggered the expression of these genes, which could then be maintained in the absence of serum. Serum was not required for induction of these genes in keratinocytes. In these cells, 1,25(OH)2D3 stimulated the expression of involucrin and transglutaminase in a concentration-dependent manner, while the SCC lines failed to respond to 1,25(OH)2D3 regardless of whether these cells had been pre-exposed to serum. An important factor that mediates 1,25(OH)2D3-stimulated gene expression is the vitamin D receptor, but vitamin D receptor mRNA levels in all the SCC lines examined were comparable to those in keratinocytes. Furthermore, the vitamin D receptor protein levels in SCC lines as assessed by ligand-binding analysis were comparable to those of keratinocytes. Thus, the mediators of 1,25(OH)2D3 action on gene expression other than the vitamin D receptor may be missing or defective in SCC lines, whereas the mediators of as yet undefined agents in serum may be better expressed in SCC lines than in keratinocytes. Our results indicate that, although SCC lines are capable of expressing the genes for the proteins involved in differentiation, the control of the expression of these genes by 1,25(OH)2D3 is abnormal in SCC despite the presence of a functional vitamin D receptor in concentrations equivalent to those in keratinocytes.