The aryl hydrocarbon receptor (AhR) heterodimerizes with the aryl hydrocarbon receptor nuclear translocator (Arnt) for transcriptional regulation. We generated three N-terminal deletion constructs of the human AhR of 12-24 kDa in size--namely D1, D2, and D3--to suppress the Arnt function. We observed that all three deletions interact with the human Arnt with similar affinities. D2, which contains part of the AhR PAS-A domain and interacts with the PAS-A domain of Arnt, inhibits the formation of the AhR gel shift complex. D2 suppresses the 3-methylcholanthrene-induced, dioxin response element (DRE)-driven luciferase activity in Hep3B cells and exogenous Arnt reverses this D2 suppression. D2 suppresses the induction of CYP1A1 at both the message and protein levels in Hep3B cells; however, the CYP1B1 induction is not affected. D2 suppresses the recruitment of Arnt to the cyp1a1 promoter but not to the cyp1b1 promoter, partly because the AhR/Arnt heterodimer binds better to the cyp1b1 DRE than to the cyp1a1 DRE. Interestingly, D2 has no effect on the cobalt chloride-induced, hypoxia inducible factor-1 (HIF-1)-dependent expression of vegf, aldolase c, and ldh-a messages. Our data reveal that the flanking sequences of the DRE contribute to the binding affinity of the AhR/Arnt heterodimer to its endogenous enhancers and the function of AhR and HIF-1 can be differentially suppressed by the D2 inhibitory molecule.