Neurogenesis involves the proliferation of multipotent neuroepithelial stem cells followed by differentiation into lineage-restricted neural precursor cells (NPCs) during the embryonic period. Interestingly, these progenitor cells express robust levels of the aryl hydrocarbon receptor (AhR), a ligand-activated transcription factor that regulates expression of genes important for growth regulation, and xenobiotic metabolism. Upon binding 2,3,7,8-tetrachlorodibenzo-p-dioxin (TCDD), a pervasive environmental contaminant and potent AhR ligand, AhR, is activated and disrupts gene expression patterns to produce cellular toxicity. Because of its widespread distribution in the brain during critical proliferative phases of neurogenesis, it is conceivable that AhR participates in NPC expansion. Therefore, this study tested the hypothesis that AhR activation by TCDD disrupts signaling events that regulate NPC proliferation. The C17.2 NPC line served as a model system to (1) assess whether NPCs are targets for TCDD-induced neurotoxicity and (2) characterize the effects of TCDD on NPC proliferation. We demonstrated that C17.2 NPCs express an intact AhR signaling pathway that becomes transcriptionally active after TCDD exposure. (3)H-thymidine and alamar blue reduction assays indicated that TCDD suppresses NPC proliferation in a concentration-dependent manner without the loss of cell viability. Cell cycle distribution analysis by flow cytometry revealed that TCDD-induced growth arrest results from an impaired G1 to S cell cycle transition. Moreover, TCDD exposure altered p27( kip1) and cyclin D1 cell cycle regulatory protein expression levels consistent with a G1 phase arrest. Initial studies in primary NPCs isolated from the ventral forebrain of embryonic mice demonstrated that TCDD reduced cell proliferation through a G1 phase arrest, corroborating our findings in the C17.2 cell line. Together, these observations suggest that the inappropriate or sustained activation of AhR by TCDD during neurogenesis can interfere with signaling pathways that regulate neuroepithelial stem cell/NPC proliferation, which could adversely impact final cell number in the brain and lead to functional impairments.