In response to dioxin, the nuclear basic helix-loop-helix (bHLH) dioxin receptor forms a complex with the bHLH partner factor Arnt that regulates target gene transcription by binding to dioxin-responsive sequence motifs. Previously, we have demonstrated that the latent form of dioxin receptor present in extracts from untreated cells is stably associated with molecular chaperone protein hsp90, and Arnt is not a component of this complex. Here, we used a coimmunoprecipitation assay to demonstrate that the in vitro-translated dioxin receptor, but not Arnt, is stably associated with hsp90. Although it showed ligand-binding activity, the in vitro-translated dioxin receptor failed to dissociate from hsp90 upon exposure to ligand. Addition of a specific fraction from wild-type hepatoma cells, however, to the in vitro-expressed receptor promoted dioxin-dependent release of hsp90. This stimulatory effect was mediated via the bHLH dimerization and DNA-binding motif of the receptor. Moreover, ligand-dependent release of hsp90 from the receptor was not promoted by fractionated cytosolic extracts from mutant hepatoma cells which are deficient in the function of bHLH dioxin receptor partner factor Arnt. Thus, our results provide a novel model for regulation of bHLH factor activity and suggest that derepression of the dioxin receptor by ligand-induced release of hsp90 may require bHLH-mediated concomitant recruitment of an additional cellular factor, possibly the structurally related bHLH dimerization partner factor Arnt. In support of this model, addition of in vitro-expressed wild-type Arnt, but not a mutated form of Arnt lacking the bHLH motif, promoted release of hsp90 from the dioxin receptor in the presence of dioxin.