The dioxin (aryl hydrocarbon) receptor is a ligand-dependent transcription factor that induces expression of a number of genes encoding drug metabolizing enzymes. In the absence of ligand the dioxin receptor is present in the cytoplasmic compartment of the cell associated with the molecular chaperone hsp90, which has been implicated in regulating the correct folding of the ligand binding domain of the receptor. In this study we have examined a potential role of the hsp90-associated p23 protein in the activation process of the dioxin receptor to a DNA binding form. In an in vitro model we show that addition of ligand alone to the dioxin receptor fails to induce release of hsp90 from the dioxin receptor. In the presence of ligand, this release was, however, induced upon addition of purified preparations of Arnt. Interestingly, p23 was also found to be associated with the nonactivated form of the dioxin receptor. Following fractionation on sucrose gradients p23 was dissociated from the receptor-hsp90 complex generating a receptor form, which showed ligand-independent release of hsp90 by Arnt and, consequently, ligand-independent activation of the DNA binding activity of the dioxin receptor. Ligand dependence was reconstituted in the presence of molybdate, a transition metal ion known to stabilize the interaction between the molecular chaperone hsp90 and p23. Taken together these experiments suggest a role of p23 in modulating ligand responsiveness in the activation process of the dioxin receptor.The bHLH-PAS dioxin (aryl hydrocarbon) 1 receptor (1, 2) is a member of a growing family of transcription factors that includes, among others, a number of circadian rhythmicity regulatory proteins (3, 4) and proteins such as the hypoxia-inducible factor HIF-1␣ (5), its endothelial cell-specific homologue E-PAS/HLF (6, 7), and Arnt (8), which is a partner factor both of the dioxin receptor and of hypoxia-inducible factors. These factors, with the possible exception of Arnt, appear to be conditionally regulated and respond to different stimuli. The dioxin receptor is activated by dioxin (9) and related environmental pollutants, whereas HIF 1␣ is activated under conditions of oxygen deprivation to induce the expression of genes encoding, e.g. erythropoietin and vascular endothelial growth factor (10).In the absence of ligand the dioxin receptor is present in a latent conformation in the cytoplasmic compartment of the cell (11) associated with the molecular chaperone hsp90 (12). Hsp90 is required both for maintaining the dioxin receptor in a latent non-DNA binding state and a ligand binding conformation (13). Expression of the dioxin receptor in mutant yeast cells containing reduced levels of hsp90 abolishes ligand responsiveness demonstrating the critical importance of hsp90 for dioxin receptor function (14, 15). The nuclear form of the dioxin receptor interacts with Arnt (16 -18) and does no longer posses the ability to bind ligand and does not interact with the molecular chaperone hsp90 (12,13). This form of the receptor spe...