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The aryl hydrocarbon receptor (AhR) is a ligand-activated transcription factor and member of the bHLH/PAS (basic Helix-Loop-Helix/Per-Arnt-Sim) family of chemosensors and developmental regulators. It represents a multifunctional molecular switch regulating endo- and xenobiotic metabolism as well as cell proliferation and differentiation. Physiologic functions of the AhR are beginning to be understood, including functions in vascular development, and in detoxification of endo- and xenobiotics. The AhR is also recognized as the culprit for most toxic responses observed after exposure to dioxins and related compounds such as 2,3,7,8-tetrachlorodibenzo-p-dioxin (TCDD). The non-metabolizable AhR agonist TCDD has to be distinguished from the myriad of metabolizable agonists present as dietary contaminants and plant constituents as well as endogenous toxins. The hypothesis is emerging that the diverse tissue-specific, TCDD-mediated toxicities are due to sustained and inappropriate AhR activation leading to deregulated physiologic functions. In support of this hypothesis recent observations in the context of some TCDD-mediated toxic responses are discussed, such as chloracne, cleft palate, thymus involution and in particular carcinogenesis. Major open questions are addressed, such as ligand-independent AhR activation by phosphorylation and the large differences in species-dependent susceptibility to toxic responses. Though important issues remain unresolved, the commentary is intended to stimulate efforts to understand dioxin-mediated toxic responses with emphasis on carcinogenesis in comparison with AhR-mediated physiologic functions.