When serially passaged, rat epidermal keratinocytes lose the inducibility of CYP1A1 gene expression in response to 2,3,7,8-tetrachlorodibenzo-p-dioxin (TCDD) exposure. In present experiments, loss of CYP1A1 inducibility occurred in a stepwise fashion, with some keratinocyte lines progressing through a transiently inducible state before becoming completely uninducible. The negative regulation occurred at the level of transcription, but the aryl hydrocarbon receptor (AhR) pathway appeared fully functional. Transient and stable transfection of uninducible cells with reporter constructs containing up to 4.2kb of the CYP1A1 5'-flanking region resulted in a TCDD-inducible increase in luciferase activity, despite no induction of the endogenous gene. Co-treatment with protein synthesis inhibitors and TCDD restored responsiveness of the endogenous CYP1A1 gene, indicating that the negative regulation was reversible and likely mediated by a labile protein. Together, these results demonstrate a novel mechanism of CYP1A1 transcriptional repression that does not involve any previously reported negative regulatory elements for CYP1A1.