Gene duplication confers genetic redundancy that can facilitate subfunctionalization, the partitioning of ancestral functions between paralogs. We capitalize on a recent genome duplication in Xenopus laevis (African clawed frog) to interrogate possible functional differentiation between alloalleles of the aryl hydrocarbon receptor (AHR), a ligand-activated transcription factor that mediates toxicity of dioxin-like compounds and plays a role in the physiology and development of the cardiovascular, hepatic, and immune systems in vertebrates. X. laevis has 2 AHR genes, AHR1α and AHR1β. To test the hypothesis that the encoded proteins exhibit different molecular functions, we used TALENs in XLK-WG cells, generating mutant lines lacking functional versions of each AHR and measuring the transcriptional responsiveness of several target genes to the toxic xenobiotic 2,3,7,8-tetrachlorodibenzo-p-dioxin (TCDD) and the candidate endogenous ligand 6-formylindolo[3,2-b]carbazole (FICZ). Mutation of either AHR1α or AHR1β reduced TCDD induction of the canonical AHR target, Cytochrome P4501A6, by 75%, despite the much lower abundance of AHR1β in wild-type cells. More modestly induced target genes, encoding aryl hydrocarbon receptor repressor (AHRR), spectrin repeat-containing nuclear envelope protein 1 (SYNE-1), and gap junction protein gamma 1 (GJC1), were regulated solely by AHR1α. AHR1β was responsible for CYP1A6 induction by FICZ, while AHR1α mediated FICZ induction of AHRR. We conclude that AHR1α and AHR1β have distinct transcriptional functions in response to specific agonists, even within a single cell type. Functional analysis of frog AHR paralogs advances the understanding of AHR evolution and as well as the use of frog models of developmental toxicology such as FETAX.