Although hepatocyte-like cells derived from human pluripotent stem cells (hPSC-HLCs) are considered a promising model for predicting hepatotoxicity, their application has been restricted because of the low activity of drug metabolizing enzymes (DMEs). Here we found that the low expression of xenobiotic receptors (constitutive androstane receptor, CAR; and pregnane X receptor, PXR) contributes to the low activity of DMEs in hPSC-HLCs. Most CAR- and PXR-regulated DMEs and transporters were transcriptionally down-regulated in hPSC-HLC. Transcriptional expression of CAR and PXR was highly repressed in hPSC-HLCs, whereas mRNA levels of aryl hydrocarbon receptor (AHR) were comparable to those of adult liver. Furthermore, ligand-induced transcriptional activation was observed only at AHR in hPSC-HLCs. Bisulfite sequencing analysis demonstrated that promoter hypermethylation of CAR and PXR was associated with diminished transcriptional activity in hPSC-HLCs. Treatment with AHR-selective ligands increased the transcription of AHR-dependent target genes by direct AHR-DNA binding at the xenobiotic response element. In addition, an antagonist of AHR significantly inhibited AHR-dependent target gene expression. Thus, AHR may function intrinsically as a xenosensor as well as a ligand-dependent transcription factor in hPSC-HLCs. Our results indicate that hPSC-HLCs can be used to screen toxic substances related to AHR signaling and to identify potential AHR-targeted therapeutics.