The molecular basis for the adverse biological effects of dioxin (2,3,7,8-tetrachlorodibenzo-p-dioxin; TCDD), a pervasive environmental toxin, is largely unknown. TCDD is a ligand for the cytosolic aromatic hydrocarbon receptor (AHR) which mediates the transcriptional induction of the xenobiotic metabolizing genes in the CYP1 family of cytochromes P450. Previous studies have suggested that the AHR may carry out important functions in the cell in addition to metabolizing toxins. We present gene expression profiles of smooth muscle cells from wild type and Ahr(-/-) mice that show significant changes in the RNA levels of the transforming growth factor-beta3 (Tgfb3) gene and genes involved in the modulation and processing of TGF-beta. The RNA expression profiles support a hypothesis that in the wild type, the AHR represses Tgfb gene expression and affects the gene expression of several TGF-beta-modulating and processing genes. We also observed that RNA levels increased for TGF-beta2, CYP1b1, and TGF-beta-related genes in Ahr(-/-) smooth muscle cells exposed to TCDD. These data are consistent with a hypothesis that TCDD stimulates the TGF-beta2 signaling pathway in the absence of the AHR to activate the Cyp1b1 gene. The above results provide a possible explanation for some of the multiple biological effects of TCDD and the physiological role played by the AHR in the absence of environmental agents.