The company is to release a software development kit in the spring, which will give developers access to the secrets behind the technology.
For now it will only be for personal use, but Microsoft says it will release a commercial version in due course.
Kinect, which turns the player's body into a game controller, has been a big hit since it launched last November.
It has already captured the imagination of the hacker community, which has been demonstrating various uses for the technology, including 3D photography.
Microsoft is hoping that an army of smarter developers will now find more ways to take Kinect to the next level.
"As breakthrough technologies like these reach scale, the resulting creativity and invention will open up a whole new world of possibilities for computing," said Craig Mundie, Microsoft's chief research and strategy officer.
The announcement was made during an open day at Microsoft's research centre near Seattle.
The company is hoping that the success of Kinect, developed by its own scientists, can give it a greater presence in the home entertainment field.