Selective inhibitory crosstalk has been known to occur within the signaling pathways of the dioxin (AhR) and estrogen (ERα) receptors. More specifically, ERα represses a cytochrome P450-encoding gene (CYP1A1) that converts cellular estradiol into a metabolite that inhibits the cell cycle, while it has no effect on a P450-encoding gene (CYP1B1) that converts estrodiol into a genotoxic product. Here we show that ERα represses CYP1A1 by targeting the Dnmt3B DNA methyltransferase and concomitant DNA methylation of the promoter. We also find that histone H2A.Z can positively contribute to CYP1A1 gene expression, and its presence at that gene is inversely correlated with DNA methylation. Taken together, our results provide a framework for how ERα can repress transcription, and how that impinges on the production of an enzyme that generates genotoxic estradiol metabolites, and potential breast cancer progression. Finally, our results reveal a new mechanism for how H2A.Z can positively influence gene expression, which is by potentially competing with DNA methylation events in breast cancer cells.