The environmental contaminant 2,3,7,8-tetrachlorodibenzo-p-dioxin (TCDD) causes a wide range of toxic, teratogenic, and carcinogenic effects. TCDD is a ligand for the aromatic hydrocarbon receptor (AHR), a ligand-activated transcription factor believed to be the primary mediator of these effects. Activation of the AHR by TCDD also elicits a variety of effects on cell cycle progression, ranging from proliferation to arrest. In this report, we have characterized further the role of the activated AHR in cell cycle regulation. In human mammary carcinoma MCF-7 and mouse hepatoma Hepa-1 cells, TCDD treatment decreased the number of cells in S phase and caused the accumulation of cells in G(1). In Hepa-1 cells, this effect correlated with the transcriptional repression of several E2F-regulated genes required for S phase progression. AHR-mediated gene repression was dependent on its interaction with retinoblastoma protein but was independent of its transactivation function because AHR mutants lacking DNA binding or transactivation domains repressed E2F-dependent expression as effectively as wild type AHR. Overexpression of p300 suppressed retinoblastoma protein-dependent gene repression, and this effect was reversed by TCDD. Chromatin immunoprecipitation assays showed that TCDD treatment caused the recruitment of AHR to E2F-dependent promoters and the concurrent displacement of p300. These results delineate a novel mechanism whereby the AHR, a known transcriptional activator, also mediates gene repression by pathways involving combinatorial interactions at E2F-responsive promoters, leading to the repression of E2F-dependent, S phase-specific genes. The AHR seems to act as an environmental checkpoint that senses exposure to environmental toxicants and responds by signaling cell cycle inhibition.