The aryl hydrocarbon receptor (AHR) mediates the toxicity of a variety of environmental chemicals. Apart from this, an understanding is emerging that the AHR has a fundamental role in female reproduction. Evidence suggests that AHR participates in regulation of follicle-stimulating hormone receptor (Fshr) transcript level in mouse ovary by binding to the promoter of this gene in vivo. The purpose of this study was to demonstrate the molecular interplay of the Fshr promoter involved in the transactivation by AHR in mouse granulosa cells. We found that AHR activates the Fshr promoter through the region from −209 to −99 bp. In this region, the importance of the E-box motif was revealed by site-directed mutagenesis followed by promoter analysis. By focusing on the DNA/protein interactions, we defined the fact that the intact E-box but not upstream transcription factor 1 (USF1), which is known to bind this motif, is necessary for AHR binding to mouse Fshr promoter. Furthermore, by constructing AHR mutants defective in DNA interaction, we confirmed the importance of DNA binding for AHR's ability to bind to and activate Fshr promoter. Collectively, the present study demonstrates that AHR modulates Fshr transactivation by its direct association through an E-box and not by recruitment via interaction with USFs. These observations suggest that although AHR and USF may respond to different signals, they compete on binding to the same E-box. Our data, together with that from one prior study suggesting involvement of E-box motif in AHR-mediated transcription, provide novel understanding of the way in which AHR may regulate its target genes through E-box sites.