The aryl hydrocarbon receptor (AHR) is a transcription factor that responds to diverse ligands and plays a critical role in toxicology, immune function, and cardiovascular physiology. The structural basis of the AHR for ligand promiscuity and preferences is critical for understanding AHR function. Based on the structure of a closely related protein HIF2α, we modeled the AHR ligand binding domain (LBD) bound to 2,3,7,8-tetrachlorodibenzo-p-dioxin (TCDD) and benzo(a)pyrene (BaP) and identified residues that control ligand preferences by shape and H-bond potential. Mutations to these residues, particularly Q377 and G298, resulted in robust and opposite changes in the potency of TCDD and BaP and up to a 20-fold change in the ratio of TCDD/BaP efficacy. The model also revealed a flexible "belt" structure; molecular dynamic (MD) simulation suggested that the "belt" and several other structural elements in the AHR-LBD are more flexible than HIF2α and likely contribute to ligand promiscuity. Molecular docking of TCDD congeners to a model of human AHR-LBD ranks their binding affinity similar to experimental ranking of their toxicity. Our study reveals key structural basis for prediction of toxicity and understanding the AHR signaling through diverse ligands. © The Author 2012. Published by Oxford University Press on behalf of the Society of Toxicology. All rights reserved.