Aryl hydrocarbon receptor (AhR) ligands such as 2,3,7,8-tetrachlorodibenzo-p-dioxin (TCDD) or benzo(a)pyrene interfere with hormonal regulatory pathways, leading to endocrine disruption. Notably, the activated AhR exerts complex effects on estrogens and retinoids at both levels of their metabolism and regulation of cognate genes. Our current investigation of these AhR effects revealed the TCDD-dependent activation of a subset of retinoid-dependent genes (tissue-transglutaminase, IGF binding protein-3, AhR) in MCF-7 breast cancer cells. A collection of in vitro hormone-dependent reporter gene models showed that AhR activation by TCDD stimulated transactivation by several class I heteromeric receptors (retinoic and thyroid hormone receptors) while it antagonized homodimeric nuclear receptors (estrogen and progesterone receptors, ER and PR). TCDD exerted a dose-dependent effect on a retinoic acid-dependent reporter gene expressed in MCF-7 cells. AhR was shown to be involved in a mutual antagonism with RARalpha corepressor SMRT (silencing mediator of retinoid and thyroid receptors). This, and the documented physical interaction between AhR and SMRT suggested that SMRT sequestration by AhR might activate RARalpha in the absence of ligand. Immunocytochemical studies of AhR and SMRT strongly suggested they colocalized in nuclear bodies during this sequestration. Concurring with this interpretation, we observed an interaction in vitro between AhR and the PML protein, the core component of nuclear bodies. This ability of AhR to elicit spurious activation of retinoid receptors expands the scope of AhR ligands influence beyond ER antagonism and specific Dioxin-responsive genes. Unknown AhR endogenous ligands may also elicit gene transactivation by class I receptors, while being inactive on classic xenobiotic-responsive genes.