The mouse aryl hydrocarbon receptor (mAhR) is a ligand-activated transcription factor that exists in a tetrameric, core complex with a dimer of the 90-kDa heat shock protein, and the hepatitis B virus X-associated protein 2 (XAP2). Transiently expressed mAhR-YFP (yellow fluorescent protein fused with the mAhR) localizes throughout cells, with a majority occupying nuclei. Co-expression of XAP2 with mAhR-YFP results in a distinct redistribution to the cytoplasm. We have utilized several approaches to attempt to identify the mechanism by which XAP2 modulates the sub-cellular localization of the mAhR. The nuclear export inhibitor, leptomycin B, was used to demonstrate that XAP2 inhibits ligand-independent nucleocytoplasmic shuttling of the receptor. Results from cytoskeletal disruption and the addition of an alternate nuclear localization sequence (NLS) to mAhR-YFP suggest that XAP2 does not physically tether the complex in the cytoplasm. The use of a rabbit polyclonal antibody raised against a portion of the bipartite NLS of the mAhR revealed that XAP2 does not appear to block access to the NLS. However, XAP2 hinders importin beta binding to the mAhR complex, suggesting that XAP2 alters the conformation of the bipartite NLS of mAhR. XAP2 also represses the transactivation potential of the AhR, in contrast to previously published reports, perhaps by stabilizing the receptor complex and/or blocking nucleocytoplasmic shuttling of the AhR complex.