The aryl hydrocarbon receptor (AHR) mediates the toxicity of dioxins, but also plays important physiological roles. Selective AHR modulators, which elicit some effects imparted by this receptor without causing the marked toxicity of dioxins, are presently under intense scrutiny. Two novel such compounds are IMA-08401 (N-acetyl-N-phenyl-4-acetoxy-5-chloro-1,2-dihydro-1-methyl-2-oxo-quinoline-3-carboxamide) and IMA-07101 (N-acetyl-N-(4-trifluoromethylphenyl)-4-acetoxy-1,2-dihydro-5-methoxy-1-methyl-2-oxo-quinoline-3-carboxamide). They represent, as diacetyl prodrugs, AHR-active metabolites of the drug compounds laquinimod and tasquinimod, respectively, which are intended for the treatment of autoimmune diseases and cancer. Here, we toxicologically assessed the novel compounds in Sprague-Dawley rats, after a single dose (8.75–92.5 mg/kg) and 5-day repeated dosing at the highest doses achievable (IMA-08401: 100 mg/kg/day; and IMA-07101: 75 mg/kg/day). There were no overt clinical signs of toxicity, but body weight gain was marginally retarded, and the treatments induced minimal hepatic extramedullary haematopoiesis. Further, both the absolute and relative weights of the thymus were significantly decreased. Cyp1a1 gene expression was substantially increased in all tissues examined. The hepatic induction profile of other AHR battery genes was distinct from that caused by 2,3,7,8-tetrachlorodibenzo-p-dioxin (TCDD). The only marked alterations in serum clinical chemistry variables were a reduction in triglycerides and an increase in 3-hydroxybutyrate. Liver and kidney retinol and retinyl palmitate concentrations were affected largely in the same manner as reported for TCDD. In vitro, the novel compounds activated CYP1A1 effectively in H4IIE cells. Altogether, these novel compounds appear to act as potent activators of the AHR, but lack some major characteristic toxicities of dioxins. They therefore represent promising new selective AHR modulators.