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AhR is an environmental response gene that mediates cellular responses to a variety of xenobiotic compounds that frequently function as AhR ligands. Many AhR ligands are classified as carcinogens or pro-carcinogens. Thus, AhR itself acts as a major mediator of the carcinogenic effect of many xenobiotics in vivo. In this concise review, mechanisms by which AhR trans-activates downstream target gene expression, modulates immune responses, and mediates malignant transformation and tumor development are discussed. Moreover, activation of AhR by post-translational modifications and crosstalk with other transcription factors or signaling pathways are also summarized.