Functional domains of the mouse aryl hydrocarbon receptor (Ahr) were investigated by deletion analysis. Ligand binding was localized to a region encompassing the PAS B repeat. The ligand-mediated dissociation of Ahr from the 90-kDa heat shock protein (HSP90) does not require the aryl hydrocarbon receptor nuclear translocator (Arnt), but it is slightly enhanced by this protein. One HSP90 molecule appears to bind within the PAS region. The other molecule of HSP90 appears to require interaction at two sites: one over the basic helix-loop-helix region, and the other located within the PAS region. Each mutant was analyzed for dimerization with full-length mouse Arnt and subsequent binding of the dimer to the xenobiotic responsive element (XRE). In order to minimize any artificial steric hindrances to dimerization and XRE binding, each Ahr mutant was also tested with an equivalently deleted Arnt mutant. The basic region of Ahr is required for XRE binding but not for dimerization. Both the first and second helices of the basic helix-loop-helix motif and the PAS region are required for dimerization. These last results are analogous to those previously obtained for Arnt (Reisz-Porszasz, S., Probst, M.R., Fukunaga, B. N., and Hankinson, O. (1994) Mol. Cell. Biol. 14, 6075-6086) compatible with the notion that equivalent regions of Ahr and Arnt associate with each other. Deletion of the carboxyl-terminal half of Ahr does not affect dimerization or XRE binding but, in contrast to an equivalent deletion of Arnt, eliminates biological activity as assessed by an in vivo transcriptional activation assay, suggesting that this region of Ahr plays a more prominent role in transcriptional activation of the cyp1a1 gene than the corresponding region of Arnt.