We studied the response to 2,3,7,8-tetrachlorodibenzo-p-dioxin (TCDD) of mouse hepatoma cells that contain a single, integrated copy of a chimeric gene under the control of a dioxin-responsive DNA domain, which was originally associated with the cytochrome P450iA1 gene. Our findings indicate that TCDD increases the RNA polymerase II-catalyzed transcription rate of the chimeric gene and that the transcripts are initiated at the correct promoter. Therefore, the dioxin-responsive DNA operates as a bona fide transcriptional enhancer. Other studies imply that the Ah receptor mediates the transcriptional response to TCDD. Our results indicate that the Ah receptor-dependent, dioxin-responsive enhancer can activate transcription when in a regulatory context and in a chromosomal location different from those of the cytochrome P450iA1 gene. Therefore, in principle, the receptor-enhancer system represents a mechanism by which numerous genes can respond to aromatic hydrocarbons in the environment.