The aryl hydrocarbon receptor (AHR) plays an essential role in the toxic response to environmental pollutants such as 2,3,7,8-tetrachlorodibenzo-p-dioxin (dioxin), in the adaptive up-regulation of xenobiotic metabolizing enzymes, and in hepatic vascular development. In our model of AHR signaling, the receptor is found in a cytosolic complex with a number of molecular chaperones, including Hsp90, p23, and the aryl hydrocarbon receptor-interacting protein (AIP), also known as ARA9 and XAP2. To understand the role of AIP in adaptive and toxic aspects of AHR signaling, we generated a conditional mouse model where the Aip locus can be deleted in hepatocytes. Using this model, we demonstrate two important roles for the AIP protein in AHR biology. (i) The expression of AIP in hepatocytes is essential to maintain high levels of functional cytosolic AHR protein in the mammalian liver. (ii) Expression of the AIP protein is essential for dioxin-induced hepatotoxicity. Interestingly, classical AHR-driven genes show differential dependence on AIP expression. The Cyp1b1 and Ahrr genes require AIP expression for normal up-regulation by dioxin, whereas Cyp1a1 and Cyp1a2 do not. This differential dependence on AIP provides evidence that the mammalian genome contains more than one class of AHR-responsive genes and suggests that a search for AIP-dependent, AHR-responsive genes may guide us to the targets of the dioxin-induced hepatotoxicity.