Dioxin is an extremely potent carcinogen. In highly exposed people, the most commonly observed toxicity is chloracne, a pathological response of the skin. Most of the effects of dioxin are attributed to its activation of the aryl hydrocarbon receptor (AHR), a transcription factor that binds to the Ah receptor nuclear translocator (ARNT) to regulate the transcription of numerous genes, including CYP1A1 and CYP1B1. In cultures of normal human epidermal keratinocytes dioxin accelerates cell differentiation, as measured by the formation of cornified envelopes. We show that this acceleration is mediated by the AHR; also, that dioxin increases the expression of several genes known to be regulated by ARNT, which have critical roles in the cornification and epidermal barrier function of the skin. Importantly, we demonstrate that all of these responses are opposed by ligand-activation of the EGF receptor (R), an important regulator of keratinocyte cell fate. In the CYP1A1 enhancer, EGFR activation prevents recruitment of the p300 coactivator, although not affecting the binding of the AHR or ARNT. The total cellular level of p300 protein does not decrease, and overexpression of p300 relieves EGFR-mediated repression of transcription, indicating that p300 is a critical target for the repression of the AHR complex by EGFR signaling. These results provide a mechanism by which 2,3,7,8-tetrachlorodibenzo-p-dioxin is able to disrupt epidermal homeostasis and identify EGFR signaling as a regulator of the AHR. This signaling may modulate the incidence and severity of chloracne and be of therapeutic relevance to human poisonings by dioxin.