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Induction of the breast cancer resistance protein (BCRP/ABCG2) expression has been found in various tissues and cell-types after exposure to chemicals including 17β-estradiol, rosiglitazone, imatinib, as well as aryl hydrocarbon receptor (AhR) activators such as 2,3,7,8-tetrachlorodibenzodioxin, 3-methylcholanthrene (3MC), and omeprazole. However, the mechanism(s) underlying AhR-related induction of ABCG2 is largely unknown. Here, we demonstrate the AhR-dependent induction of ABCG2 expression in human colon adenocarcinoma LS174T cells. Importantly, a novel distal AhR-responsive element (AhRE5) located −2357/−2333 bp upstream of the ABCG2 transcriptional start site has been identified and characterized as a functional unit pivotal to 3MC-mediated induction of ABCG2. Cell-based reporter assays revealed that deletion of AhRE5 and 4 dramatically attenuated 3MC-induced activation of ABCG2 reporter activity, while further deletion of the proximal AhRE3 and 2 only moderately changed the luciferase activities. Notably, site-directed mutation of the AhRE5 in the BCRP-3.8 kb reporter construct alone resulted in approximately 80% decrease in 3MC activation of the ABCG2 promoter; additional mutation of the AhRE4 site had negligible effect on the ABCG2 promoter activity. Moreover, chromatin immunoprecipitation assays demonstrated that treatment with 3MC significantly enhanced the recruitment of AhR to the AhRE5 occupied region, and mutation of the AhRE5 site clearly dissociated AhR protein from this promoter region. Together, these data show that the novel distal AhRE5 is critical for AhR-mediated transcriptional activation of ABCG2 gene expression in LS174T cells, and it may offer new strategies for early identification of ABCG2 inducers, which would be of benefit for preventing transporter-associated drug–drug interactions.