Aryl hydrocarbon hydroxylase (AHH, cytochrome P1-450) is induced in chick liver very early during embryonic development if embryos are treated with 3-methylcholanthrenetype compounds such as 3,4,3'4'-tetrachlorobiphenyl. In mammals, AHH induction is known to be mediated by the Ah receptor. Liver from embryonic and newly hatched chicks was found to contain a cytosolic receptor for 2,3,7,8-tetrachlorodibenzo-p-dioxin (TCDD) which has properties that are very similar to properties of the Ah receptor previously characterized in mammalian tissues. In chick embryo liver, cytosolic binding sites for TCDD were of high affinity (Kd for [3-HI-TCDD = 0.2 nM) and were specific for 3-methylcholanthrene-type inducers. The specific binding component sedimented at about 9s on sucrose density gradients prepared at low ionic strength. A high level of Ah receptor was detected in chick embryo liver by the fifth day of incubation (5 DI); this is at least 24 hours prior to the onset of AHH inducibility. The Ah receptor concentration increased from 5 DI to 8 DI, the period when chick liver is undergoing early morphological differentiation. After 8 DI, Ah receptor levels dropped substantially and remained low into the posthatching period. In contrast, AHH inducibility was high by 7 DI and remained high throughout embryonic development and into the posthatching period. The discrepancy between Ah receptor levels and the degree of AHH inducibility suggests that only a small fraction of the Ah receptor population is required for maximal AHH induction.