Aryl hydrocarbon receptor (AhR) ligands such as 2,3,7,8-tetrachlorodibenzo-p-dioxin (TCDD) and metals, such as mercury (Hg(2+)), are environmental co-contaminants and their molecular interaction may disrupt the coordinated regulation of the carcinogen-activating enzyme cytochrome P450 1A1 (CYP1A1). Therefore, we examined the effect of co-exposure to Hg(2+) and TCDD on the expression of the CYP1A1 in HepG2 cells. Our results showed that Hg(2+) significantly inhibited the TCDD-mediated induction of CYP1A1 at the mRNA, protein, and catalytic activity levels. At the transcriptional level, co-exposure to Hg(2+) and TCDD significantly decreased the TCDD-mediated induction of AhR-dependent luciferase reporter gene expression. Moreover, Hg(2+) did not affect CYP1A1 mRNA stability, while decreasing its protein half-life, suggesting the involvement of a posttranslational mechanism. Importantly, Hg(2+) increased the expression of heme oxygenase-1 (HO-1), a rate limiting enzyme in heme degradation, which coincided with further decrease in the CYP1A1 catalytic activity levels. Upon using a competitive HO-1 inhibitor, tin mesoporphyrin, heme precursor, hemin, or transfecting the HepG2 cells with siRNA for HO-1 there was a partial restoration of the inhibition of TCDD-mediated induction of CYP1A1 catalytic activity. In conclusion, we demonstrate that Hg(2+) down-regulates the expression of CYP1A1 at the transcriptional and posttranslational levels in HepG2 cells. In addition, HO-1 is involved in the modulation of CYP1A1 at the posttranslational level.