The aryl hydrocarbon receptor (AhR) is a ligand-activated transcription factor that regulates transcription of a number of target genes upon binding ligands such as 2,3,7,8-tetrachlorodibenzo-p-dioxin (TCDD). Large intra- and interspecies variations exist with respect to sensitivity to TCDD, and this could, at least in part, be due to a considerable variation in the AhR amino acid sequence between species. The N-terminal half of the AhR is well-conserved across species, whereas the C-terminal half exhibits a considerable degree of degeneracy. It has previously been shown that there are differences between the mouse (mAhR) and human AhR (hAhR) in terms of cellular localization, nucleocytoplasmic shuttling, the effect of chaperone proteins on these properties, and differences in relative ligand affinity. In this study, two chimeras were generated such that each had the N-terminal half of one receptor and the C-terminal half of the other receptor. The C-terminal half of the receptor, containing the transactivation domain, determines the cellular localization of the transiently transfected receptor and regulates the ability of hepatitis B virus X-associated protein 2 (XAP2) to inhibit ligand-independent nuclear import of AhR. In addition, the transactivation domain (TAD) appears to determine the presence of XAP2 in the nuclear ligand-bound AhR/hsp90 complex prior to association with the AhR nuclear translocator protein (ARNT). However, the transactivation domain does not appear to play a role in determining relative ligand affinity of the receptor, and mAhR and hAhR have similar overall transactivation potential in a cell-based reporter system at a saturating dose of ligand. This study demonstrates for the first time that the transactivation domain of the AhR influences important biochemical properties of the N-terminal half of the AhR, and the degeneracy in the transactivation domain between the mAhR and the hAhR results in species-specific differences in receptor properties.