The mammalian Ah receptor (AhR) is a ligand-activated transcription factor with multiple functions in adaptive metabolism, development and dioxin toxicity in a variety of organs and cell systems. Phenotypes observed following sustained activation by dioxin or in AhR-null mice suggest organ-dependent physiological functions. These functions are probably deregulated following exposure to dioxin. We focus on skin and liver to facilitate discussion of mechanisms linking phenotypes and AhR-modulated genotypes. After a brief summary of currently discussed AhR ligand candidates, two groups of direct AhR target genes/proteins and associated functions are highlighted: (i) xenobiotic-metabolizing enzymes which are also involved in homeostasis of endogenous ligands and (ii) proteins controlling cell proliferation/apoptosis, differentiation and inflammation. Homeostatic feedback loops might not only include CYP1A1 but also Phase II enzymes such as UGT1A1 which controls the antioxidant AhR ligand bilirubin. The AhR is involved in extensive crosstalk with other transcription factors and multiple signaling pathways. Efforts elucidating the pathway toward identification of physiological functions of the AhR remain challenging and promising.