The trifunctional carbamoylphosphate synthetase/aspartate transcarbamyltransferase/dihydroorotase (CAD) gene is hormone responsive in MCF-7 and ZR-75 breast cancer cells, and this response is inhibited by the aryl hydrocarbon receptor (AhR) agonist 2,3,7,8-tetrachlorodibenzo-p-dioxin (TCDD). Estrogen-dependent induction of CAD mRNA and reporter gene activity in cells transfected with constructs (pCAD) containing hormone-responsive GC-rich CAD promoter inserts involves estrogen receptor alpha (ERalpha)/Sp1 interactions with these proximal GC-rich motifs. TCDD also inhibits hormone-induced transactivation in MCF-7 and ZR-75 cells transfected with pCAD constructs. The mechanism of inhibitory AhR-ERalpha/Sp1 cross talk was further investigated by chromatin immunoprecipitation (ChIP), and the results show that ERalpha/Sp1 and the AhR are constitutively bound to the CAD gene promoter and only minor changes are observed after treatment with 17beta-estradiol, TCDD, or their combination. However, examination of interactions of these transcription factors by fluorescence resonance energy transfer shows that E2 enhances ERalpha-Sp1 interactions, whereas cotreatment with TCDD significantly decreases interaction of these proteins. These results suggest that inhibitory AhR-ERalpha/Sp1 cross talk is due, in part, to enhanced association of AhR and ERalpha (also determined by fluorescence resonance energy transfer), which coordinately dissociates ER and Sp1 and decreases ERalpha/Sp1-mediated transactivation, whereas remaining associated with the CAD promoter. This represents a novel interaction between two ligand activated receptors where one receptor inhibits activation of the second receptor.