The aryl hydrocarbon receptor (AHR) is a ligand-activated transcription factor involved in the regulation of multiple cellular pathways, such as xenobiotic metabolism and Th17 cell differentiation. Identification of key physiologically relevant ligands that regulate AHR function remains to be accomplished. Screening of indole metabolites has identified indoxyl 3-sulfate (I3S) as a potent endogenous ligand that selectively activates the human AHR at nanomolar concentrations in primary human hepatocytes, regulating transcription of multiple genes, including CYP1A1, CYP1A2, CYP1B1, UGT1A1, UGT1A6, IL6, and SAA1. Furthermore, I3S exhibits an approximately 500-fold greater potency in terms of transcriptional activation of the human AHR relative to the mouse AHR in cell lines. Structure-function studies reveal that the sulfate group is an important determinant for efficient AHR activation. This is the first phase II enzymatic product identified that can significantly activate the AHR, and ligand competition binding assays indicate that I3S is a direct AHR ligand. I3S failed to activate either CAR or PXR. The physiological importance of I3S lies in the fact that it is a key uremic toxin that accumulates to high micromolar concentrations in kidney dialysis patients, but its mechanism of action is unknown. I3S represents the first identified relatively high potency endogenous AHR ligand that plays a key role in human disease progression. These studies provide evidence that the production of I3S can lead to AHR activation and altered drug metabolism. Our results also suggest that prolonged activation of the AHR by I3S may contribute to toxicity observed in kidney dialysis patients and thus represent a possible therapeutic target.