Dioxin-inducible, Ah receptor-dependent transcription in vitro. We have developed a homologous in vitro transcription system that requires (i) 2,3,7,8-tetrachlorodibenzo-p-dioxin (called TCDD or dioxin), (ii) the Ah receptor, and (iii) a dioxin-responsive enhancer for activity. Unfractionated nuclear extracts from mouse hepatoma cells contain an inhibitor and fail to direct transcription in vitro. However, following phosphocellulose chromatography and reconstitution, the fractionated nuclear extract directs accurate transcription in vitro, using as a template the promoter/enhancer region from the mouse cytochrome P1-450 gene (Cyp1a1) linked to a "G-free cassette" (which generates a transcript with no guanosine residues). Extracts from TCDD-treated cells exhibit higher activity than extracts from untreated cells when transcribing a template containing both the promoter and enhancer but not when transcribing a template containing the promoter alone. Extracts from Ah receptor-defective cells fail to direct in vitro transcription in a TCDD-inducible fashion. A regulatory element that contains two binding sites for the liganded Ah receptor plus a truncated Cyp1a1 promoter suffices to direct TCDD-inducible, Ah receptor-dependent transcription in vitro. The inducible, receptor-dependent, enhancer-dependent properties of this system make it appropriate for analyzing in vitro the mechanism of dioxin action and the function of the Ah receptor. 