The aryl hydrocarbon receptor (AHR) is known to mediate the toxic and carcinogenic effects of polycyclic aromatic hydrocarbons and dioxins. High-affinity AHR ligands, such as 2,3,7, 8-tetrachlorodibenzeno-p-dioxin, have been shown to modify cell proliferation and differentiation. However, the mechanisms by which AHR affects cell proliferation and differentiation are not fully understood. To investigate the role of AHR in cell proliferation, mouse embryonic fibroblasts (MEFs) derived from AHR-null mice were obtained and characterized. Compared with wild-type MEFs, AHR-null cells exhibited a lower proliferation rate with an accumulation of 4N DNA content and increased apoptosis. The expression levels of Cdc2 and Plk, two kinases important for G(2)/M phase of cell cycle, were down-regulated in AHR-null MEFs. In contrast, transforming growth factor-beta (TGF-beta), a proliferation inhibitor in several cell lines, was present at high levels in conditioned medium from AHR-null MEFs. Concomitant with G(2)/M cell accumulation, treatment of wild-type MEFs with TGF-beta3 also resulted in down-regulation of both Cdc2 and Plk. Thus, overproduction of TGF-beta in AHR-deficient cells appears to be the primary factor that causes low proliferation rates and increased apoptosis. Taken together, these results suggest that AHR influences TGF-beta production, leading to an alteration in cell cycle control.