Changes in the concentration or subcellular location of the key proteins involved in signal transduction pathways have been shown to impact gene regulation. Studies were designed to evaluate the relationship between aryl hydrocarbon receptor (AHR) localization, stability, and gene regulation in a defined system where the endogenous AHR protein could be evaluated. The findings indicate that treatment of cells with geldanamycin (GA) or MG-132 (an inhibitor of the 26S proteasome) results in nuclear translocation of the endogenous AHR in both human HepG2 and murine Hepa-1 cells without induction of endogenous CYP1A1 protein. Exposure to GA resulted in the degradation of AHR by >90% in the nucleus via the 26S proteasome. Importantly, the reduced level of AHR resulted in a 50% reduction in the maximal level of CYP1A1 induced by 2,3,7,8-tetrachlorodibenzo-p-dioxin (TCDD). In all treatments the concentration of the AHR nuclear translocator (ARNT) protein was unchanged and had no impact on the localization of the AHR. Thus, ligand-independent translocation of the AHR to the nucleus was not sufficient to induce CYP1A1 in the absence of ligand, but reductions in the level of the endogenous AHR protein pool shifted the dose-response curve for TCDD to the right.