The Drosophila spineless (ss) gene encodes a basic-helix-loop-helix-PAS transcription factor that is required for proper specification of distal antennal identity, establishment of the tarsal regions of the legs, and normal bristle growth. ss is the closest known homolog of the mammalian aryl hydrocarbon receptor (Ahr), also known as the dioxin receptor. Dioxin and other aryl hydrocarbons bind to the PAS domain of Ahr, causing Ahr to translocate to the nucleus, where it dimerizes with another bHLH-PAS protein, the aryl hydrocarbon receptor nuclear translocator (Arnt). Ahr:Arnt heterodimers then activate transcription of target genes that encode enzymes involved in metabolizing aryl hydrocarbons. In this report, we present evidence that Ss functions as a heterodimer with the Drosophila ortholog of Arnt, Tango (Tgo). We show that the ss and tgo genes have a close functional relationship: loss-of-function alleles of tgo were recovered as dominant enhancers of a ss mutation, and tgo-mutant somatic clones show antennal, leg, and bristle defects almost identical to those caused by ss(-) mutations. The results of yeast two-hybrid assays indicate that the Ss and Tgo proteins interact directly, presumably by forming heterodimers. Coexpression of Ss and Tgo in Drosophila SL2 cells causes transcriptional activation of reporters containing mammalian Ahr:Arnt response elements, indicating that Ss:Tgo heterodimers are very similar to Ahr:Arnt heterodimers in DNA-binding specificity and transcriptional activation ability. During embryogenesis, Tgo is localized to the nucleus at sites of ss expression. This localization is lost in a ss null mutant, suggesting that Tgo requires heterodimerization for translocation to the nucleus. Ectopic expression of ss causes coincident ectopic nuclear localization of Tgo, independent of cell type or developmental stage. This suggests that the interaction of Ss and Tgo does not require additional signals, unlike the ligand-dependent interaction of Ahr and Arnt. Despite the very different biological roles of Ahr and Arnt in insects and mammals, the molecular mechanisms by which these proteins function appear to be largely conserved.