Flutamide (FLU), an oral, nonsteroidal antiandrogen drug used in the treatment of prostate cancer, is associated with idiosyncratic hepatotoxicity that sometimes causes severe liver damage, including cholestasis, jaundice, and liver necrosis. To understand the mechanism of toxicity, a combination of aryl hydrocarbon receptor (Ahr)-deficient (Ahr−/−) mice, primary hepatocytes, luciferase reporter gene assays, in silico ligand docking and ultra-performance chromatography-quadrupole time-of-flight mass spectrometry-based metabolomics was used. A significant increase of liver weights, and liver and serum bile acid levels was observed after FLU treatment, indicating hepatomegaly and disrupted bile acid homeostasis. Expression of the AhR gene battery was markedly increased in livers of wild-type mice Ahr+/+ treated with FLU, while no change was noted in Ahr−/− mice. Messenger RNAs encoded by AhR target genes were induced in primary mouse hepatocytes cultured with FLU, which confirmed the in vivo results. Ligand-docking analysis further predicted that FLU is an AhR agonist ligand which was confirmed by luciferase reporter gene assays. Multivariate data analysis showed that bile acids were responsible for the separation of vehicle- and FLU-treated Ahr+/+ mice, while there was no separation in Ahr−/− mice. Expression of mRNA encoding the bile acid transporter ABCC4 was increased and farnesoid X receptor signaling was inhibited in the livers of Ahr+/+ mice, but not in Ahr−/− mice treated with FLU, in agreement with the observed downstream metabolic alterations. These findings provide new insights into the mechanism of liver injury caused by FLU treatment involving activation of AhR and the alterations of bile acid homeostasis, which could guide clinical application.