Rainbow trout aryl hydrocarbon receptor (AHR) nuclear translocator isoform a (rtARNTa) has a negative function in AHR-mediated signal transduction. Previous analyses suggest that the negative function is at the level of DNA binding and may be due to the presence of 57 C-terminal amino acids that are strongly hydrophobic. To assess the negative activity of rtARNTa at the molecular level, hydrophobic-rich domains corresponding to amino acids 601-637, 601-631, and 616-631 were analyzed for the ability to affect the function of truncated rtARNT proteins in complementation and gel shift assays. Addition of the hydrophobic-rich domains to these proteins reduced their ability to complement AHR-mediated signal transduction in mouse hepatoma cells by 65-95%. The decrease in function was related to a reduced ability of the AHR. rtARNT complex to bind DNA and not due to a lack of dimerization with AHR. Expression of the hydrophobic-rich domains on Gal4 proteins showed that the C-terminal domain of rtARNTa was unlikely to contain transactivation function; however, the hydrophobic domains reduced the ability of the Gal4 proteins to bind DNA. Immunoprecipitation and mutational experiments indicate that the hydrophobic-rich domains do not interact with the bHLH motif of AHR. Interestingly, immunoprecipitation experiments also revealed that the C-terminal hydrophobic-rich region of rtARNTa could oligomerize in vitro in a chimera with the Gal4 DNA binding domain. These findings indicate that the C-terminal hydrophobic amino acids are critical for the negative function of rtARNTa in AHR-mediated signaling and suggest that multiple mechanisms may be involved in the repression of DNA binding.