1. On the basis of our current knowledge about the evolution of drug-metabolizing enzymes, it appears to be extremely likely that these enzymes play a critical role in maintaining steady-state levels of the ligands involved in ligand-modulated transcription of genes effecting growth, differentiation, homeostasis, and neuroendocrine functions. 2. The original observations about genetic differences in CYP1A1 (cytochrome P1-450) induction by TCDD or benzo[a]pyrene in the mouse have led to an appreciation for a similar polymorphism in the human and the recent cloning of the murine Ah receptor (Ahr) and human Ah receptor nuclear translocator (ARNT) genes. It is most likely that the correlation between genetic differences in human or murine CYP1A1 inducibility by polycyclic hydrocarbons or TCDD and increased risk of cancer will be explained by differences in the AHR gene, leading to enhanced tumor promotion (rather than in the CYP1A1 structural gene). Perhaps the same will be found for birth defects, immunotoxicity, and other forms of toxic damage caused by these environmental chemicals. 3. In a manner similar to that of the phorbol ester tumor promoter, TCDD induces intracellular Ca2+ changes, accumulation of FOS and JUN mRNAs, and large increases in AP-1 transcription factor activity. Interestingly, these early effects of TCDD, and also of benzo[a]pyrene, appear not to require the Ah receptor. 4. Many genes are induced by TCDD, and many others are induced by electrophilic metabolites such as quinones and H2O2; using several mouse experimental systems, we have defined a subset of six of these genes as constituting the [Ah] battery by the sole criterion that a functional CYP1A1 or CYP1A2 enzyme is able to repress the expression of genes that are members of this gene battery.