The sterol, 1,25-dihydroxyvitamin D3 (1,25(OH)2D3), has immunosuppressive activity. The hormone inhibits the production of lymphokines (IL-2, IFN-gamma) and monocyte-derived cytokine (IL-12) leading to inhibition of helper T cell subset type 1 (Th1). When given in vivo, the hormone prevents the development of spontaneous and induced models of autoimmunity. Analogs of 1,25(OH)2D3, with reduced hypercalcemic effects, display an enhanced activity in autoimmunity compared to the sterol and prolong graft survival in experimental transplantation. This paper reviews our understanding of the cellular actions of the hormone and the therapeutic application of 1,25(OH)2D3 and analogs in autoimmunity and transplantation.