The aryl hydrocarbon receptor (AHR) is a ligand-activated transcription factor that mediates the biological and toxic effects of its xenobiotic ligands. Previous cell culture studies have shown that, in addition to controlling the xenobiotic detoxification response, AHR activation leads to G0-G1 arrest, diminished capacity for DNA replication, and inhibition of cell proliferation. In fact, recent work from our own and from other laboratories suggests that AHR may function as a tumor suppressor gene that becomes silenced during the process of tumor formation. To test this hypothesis and determine whether the mouse Ahr gene acts as a tumor suppressor gene in vivo, we have examined the role of Ahr ablation in liver tumorigenesis induced by the genotoxic chemical diethylnitrosamine (DEN), a hepatic carcinogen that is not an AHR ligand. In mice given a single i.p. injection of DEN, AHR antagonized liver tumor formation and growth by regulating cell proliferation, inflammatory cytokine expression, and DNA damage, parameters which were significantly elevated in the livers of control and, more so, of DEN-exposed Ahr-/- mice. Ahr-/- hepatocytes also showed significantly higher numbers of 4N cells, increased expression of proliferative markers, and repression of tumor suppressor genes. These data support the concept that in its basal state in the absence of a xenobiotic ligand, the Ahr gene functions as a tumor suppressor gene, and that its silencing may be associated with cancer progression.