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Dioxin (2,3,7,8‐tetrachlorodibenzo‐p‐dioxin; TCDD), a widespread polychlorinated aromatic hydrocarbon, caused tumors in the liver and other sites when administered chronically to rats at doses as low as 0.01 μg/kg/day. It functions in combination with a cellular protein, theAh receptor, to alter gene regulation, and this resulting modulation of gene expression is believed to be obligatory for both dioxin toxicity and carcinogenicity. The U.S. EPA is reevaluating its dioxin risk assessment and, as part of this process, will be developing risk assessment approaches for chemicals, such as dioxin, whose toxicity is receptor‐mediated. This paper describes a receptor‐mediated physiologically based pharmacokinetic (PB‐PK) model for the tissue distribution and enzyme‐inducing properties of dioxin and discusses the potential role of these models in a biologically motivated risk assessment. In this model, ternary interactions among the Ah receptor, dioxin, and DNA binding sites lead to enhanced production of specific hepatic proteins. The model was used to examine the tissue disposition of dioxin and the induction of both a dioxin‐binding protein (presumably, cytochrome P4501A2), and cytochrome P4501A1. Tumor promotion correlated more closely with predicted induction of P4501A1 than with induction of hepatic binding proteins. Although increased induction of these proteins is not expected to be causally related to tumor formation, these physiological dosimetry and gene‐induction response models will be important for biologically motivated dioxin risk assessments in determining both target tissue dose of dioxin and gene products and in examining the relationship between these gene products and the cellular events more directly involved in tumor promotion.