The aryl hydrocarbon receptor (AHR) is a ligand-activated transcription factor that mediates the effects of agonists like 2,3, 7,8-tetrachlorodibenzo-p-dioxin. In the current model for AHR signaling, the unliganded receptor is found in the cytosol as part of a complex with a dimer of the 90-kDa heat shock protein and an immunophilin-like molecule, ARA9. In yeast, expression of ARA9 results in an increase in the maximal agonist response and a leftward shift in the AHR dose-response curve. To better understand the mechanism by which ARA9 modifies AHR signal transduction, we performed a series of coexpression experiments in yeast and mammalian cells. Our results demonstrate that ARA9's influence on AHR signaling is not due to inhibition of a membrane pump or modification of the receptor's transactivation properties. Using receptor photoaffinity labeling experiments, we were able to show that ARA9 enhances AHR signal transduction by increasing the available AHR binding sites within the cytosolic compartment of the cell. Our evidence suggests that ARA9's effects are related to its role as a cellular chaperone; i.e. we observed that expression of ARA9 increases the fraction of AHR in the cytosol and also stabilized the receptor under heat stress.