The aryl hydrocarbon receptor (AhR) is an intracellular receptor protein that regulates gene transcription in response to both man-made and natural ligands. A modular transactivaton domain (TAD) has been mapped to the 304 C-terminal amino acids and consists of acidic, Q-rich, and P/S/T-rich subdomains. We have used steady-state intrinsic tryptophan fluorescence and circular dichroism spectroscopy to investigate the conformation of the acidic Q-rich region. The results reveal that this region of the protein is structurally flexible but adopts a more folded conformation in the presence of the natural osmolyte trimethylamine N-oxide (TMAO) and the solvent trifluoroethanol (TFE). In protein-protein interaction studies, the acidic Q-rich region bound to components of the general transcription machinery [TATA-binding protein (TBP), TAF4, and TAF6] as well as the coactivator proteins SRC-1a and TIF2. The binding site for TBP mapped to the acidic subdomain, while SRC-1a bound preferentially to the Q-rich sequence. Significantly, the binding of TBP was modulated by induced folding of the TAD with TMAO. The results indicate that the AhR TAD makes multiple interactions with the transcriptional machinery and protein conformation plays a critical role in receptor function. Taken together, these findings support a role for protein folding in AhR action and suggest possible mechanisms of receptor-dependent gene activation.