The molecular chaperone complex hsp90-p23 interacts with the dioxin receptor, a ligand-dependent basic helix-loop-helix (bHLH)/Per-Arnt-Sim domain transcription factor. Whereas biochemical and genetic evidence indicates that hsp90 is important for maintenance of a high-affinity ligand binding conformation of the dioxin receptor, the role of hsp90-associated proteins in regulation of the dioxin receptor function remains unclear. Here we demonstrate that the integrity of the hsp90 complex characterized by the presence of the hsp90-associated cochaperone p23 and additional cochaperone proteins is important for regulation of the intracellular localization of the dioxin receptor by two mechanisms. First, in the absence of ligand, the dioxin receptor-hsp90 complex was associated with the immunophilin-like protein XAP2 to mediate cytoplasmic retention of the dioxin receptor. Second, upon exposure to ligand, the p23-associated hsp90 complex mediated interaction of the dioxin receptor with the nuclear import receptor protein pendulin and subsequent nuclear translocation of the receptor. Interestingly, these two modes of regulation target two distinct functional domains of the dioxin receptor. Whereas the nuclear localization signal-containing and hsp90-interacting bHLH domain of the receptor regulates ligand-dependent nuclear import, the interaction of the p23-hsp90-XAP2 complex with the ligand binding domain of the dioxin receptor was essential to mediate cytoplasmic retention of the ligand-free receptor form. In conclusion, these data suggest a novel role of the hsp90 molecular chaperone complex in regulation of the intracellular localization of the dioxin receptor.