Aryl hydrocarbon receptor (AhR) is a ligand-activated transcription factor that mediates a spectrum of toxic and biological effects of 2,3,7,8-tetrachloro dibenzo-p-dioxin (TCDD) and related compounds. Peroxisome proliferator activated receptor alpha (PPARalpha) is a nuclear receptor involved in the maintenance of lipid and glucose homeostasis. In this study we hypothesized that one of the possible mechanisms for the effect of TCDD and its related chemicals on fat metabolism could be through down regulation of PPARalpha functions. We treated Wistar rats with an AhR ligand, Sudan III (S.III), and/or PPARalpha ligand, Clofibric Acid (CA), for 3 days. We analysed the expression of one of the PPARalpha-target gene products, CYP4A protein and its mRNA. We also tested HepG2 cells with the afore-mentioned treatments and evaluated their effects on PPARalpha and RXRalpha protein. Treatment of Wistar rats with S.III was found to down regulates CYP4A protein expression and reduced its induction with CA. It also decreased mRNA expressions of CYP4A1, CYP4A2, CYP4A3 and PPARalpha. In HepG2 cells, PPARalpha and RXRalpha protein expression was decreased by S.III treatment in a dose dependent manner. Our results suggest that AhR has an inhibitory effect on PPARalpha function and a new pathway by which AhR ligands could disturb lipid metabolism.