To further understand the role that the hepatitis B virus X-associated protein 2 (XAP2) plays in regulating aryl hydrocarbon receptor (AhR) function, a point mutation was introduced at tyrosine 408 of the AhR, changing the residue to an alanine or lysine. These mutations resulted in the loss of AhR binding to endogenous XAP2 in COS-1 cells and reduced binding of exogenously expressed XAP2. Cellular localization of the mutant AhR-yellow fluorescent protein fusion proteins remained nuclear when XAP2 was co-expressed, while the non-mutant receptor was redistributed to the cytoplasm. XAP2 expression caused an overall repression of constitutive and ligand-induced AhR transcriptional activity. However, increased expression of XAP2 had no effect on the AhRY408A mutant transcriptional activity. Additionally the XAP2 binding-deficient AhR mutants showed overall higher transcriptional activity when compared with the non-mutant receptor. Interestingly reduced incorporation of the Hsp90 associated co-chaperone p23 in the unliganded AhR complex was observed with increasing XAP2 expression. The displacement of p23 from Hsp90 did not occur when increasing levels of XAP2 were introduced in COS-1 cells in the absence of the AhR; thus this displacement event occurs specifically within an AhR complex. Finally XAP2 itself was capable of existing in multimeric complexes, and these complexes did not require Hsp90 or AhR to form. However, it is not yet clear whether XAP2 can exist within the AhR complex in more than one copy.