The aryl hydrocarbon receptor (AhA), a ligand-activated Bhlh/PAS transcription factor, mediates a broad range of biological responses to halogenated aromatic hydrocarbons. TCDD, a potent agonist for AhA, induces a rapid reduction of the steady state AhA. In this study, we analyzed the mechanism of the agonist-induced down regulation of AhA. We show that TCDD shortens the half life of AhA, as measured by pulse-chase experiment. The TCDD-induced degradation of both unlabeled and pulse-labeled AhA is blocked by lactacystin and MG132, potent inhibitors of the 26S proteasome. Treatment with TCDD induces formation of ubiquitinated AhA. Furthermore, analyses of AhA degradation in cells bearing a temperature-sensitive mutation in the ubiquitin-activating enzyme (E1) reveal that degradation of AhA in both untreated and TCDD-treated cells requires functional E1. Collectively, these studies demonstrate that TCDD induces degradation of AhA via a ubiquitin-proteasome pathway. Lastly, we show that treatment with proteasome inhibitors enhances the induction of CYP1A1 gene expression by TCDD, suggesting that the ubiquitinproteasome mediated degradation of AhA serves as a mechanism for controlling the activity of ligand-activated AhA.