The murine Ah locus has two structural genes, P1-450 and P3-450, that are members of the 2,3,7,8-tetrachlorodibenzo-p-dioxin-inducible P-450 gene family and are closely linked on mouse chromosomes 9. Transcriptional activation of both genes in liver is controlled by the Ah receptor. Inducible P1-450 mRNA is correlated with aryl hydrocarbon hydroxylase activity, whereas inducible P3-450 mRNA is correlated with acetanilide 4-hydroxylase activity. This report shows that inducible P3-450 mRNA is also highly correlated with estradiol 2-hydroxylase activity. Both P1-450 and P3-450 activities are induced by 3-methylcholanthrene in liver; in contrast, P1-450 but not P3-450 activity is induced to a significant extent in kidney, lung, and intestine. Constitutive levels of P3-450 mRNA in liver are at least five times greater than those of P1-450 mRNA, thus accounting for the much greater "fold inducibility" of aryl hydrocarbon hydroxylase than acetanilide 4-hydroxylase or estradiol 2-hydroxylase. The hepatic P3-450 induction response occurs at lower inducer concentrations than the P1-450 induction response, suggesting a difference in affinity of the inducer-receptor complex for regulatory regions of the two genes. Developmentally, P1-450 inducibility occurs at least 2 weeks earlier in gestation than P3-450 inducibility, which occurs near the time of birth. These data thus demonstrate striking differences between the expression of two homologous genes in the same P-450 subfamily, with respect to developmental and tissue specificity and sensitivity to common inducers that interact with the Ah receptor.