The aryl hydrocarbon receptor (AHR) is a ligand-activated signaling molecule which is involved in diverse biological functions ranging from cancer metastasis to immune regulation. This receptor forms a cytoplasmic complex with Hsp90, p23, and XAP2. We have previously reported that down-regulation of p23 triggers degradation of the AHR protein, uncovering a potentially dynamic event which controls the cellular AHR levels without ligand treatment. Here we investigate the underlying mechanisms for this p23 effect using wild-type HeLa and the p23 knockdown HeLa cells. Reduction of the Hsp90 and XAP2 contents, however, did not affect the AHR protein levels, implying that this p23 effect on AHR is more than just alteration of the cytoplasmic complex dynamics. Association of p23 with Hsp90 is not important for the modulation of the AHR levels since exogenous expression of p23 mutants with modest Hsp90-binding affinity effectively restored the AHR message and protein levels. The protein folding property of p23 which resides at the terminal 50-amino acid region is not involved for this p23 effect. Results from our interaction study using the affinity purified thioredoxin fusion proteins and GST fusion proteins showed that p23 directly interacts with AHR and the interaction surface lies within AHR amino acid 1–216 and p23 amino acid 1–110. Down-regulation of the p23 protein content promotes the ubiquitination of AHR, indicating that p23 protects AHR from the ubiquitin-meditated protein degradation.