The discovery of immune checkpoints and the subsequent development of pharmacological immune checkpoint inhibitors generated excitement and optimism that researchers had finally found the key to inducing complete remission of tumors. Inhibitors targeting the PD-1/PD-L1 signaling axis, though still facing limitations with widespread utility, have proven to be beneficial in multiple types of cancerous tissues. While some patients experience dramatic results, immune checkpoint inhibitors are not the panacea that was initially hoped. Why anti-PD-1/anti-PD-L1 therapies often come up short might be that the underlying regulators of PD-L1 expression or other molecular regulators of immune suppression are not being addressed by the pharmacological immunomodulators. One protein often active in the tumor microenvironment (TME) is involved in both these possibilities: the aryl hydrocarbon receptor (AhR). The AhR is a ligand-activated transcription factor that can suppress immune activation as well as drive cancer progression by regulating transcription of a myriad of different genes within both malignant and immune cells. While AhR activation often correlates with poor prognosis in a variety of cancers, how AhR activation affects functional characteristics within and between malignant cells and immune cells in the TME is not fully understood. This is especially true in lung cancer, one of the most common and deadliest malignancies, which develops in an organ with many tissue-resident immune cells and opportunities to encounter exogenous pathogens—and environmental AhR agonists. To this end, we sought to elucidate the interactions between the AhR and its immunomodulatory target genes, PD-L1 and IDO1, in malignant lung adenocarcinoma (LUAD) cells and to determine how these interactions influence immunosuppression in the greater TME. The following work describes how AhR activation in LUAD cells results in the upregulation of two immune checkpoints, PD-L1 and IDO, in the malignant cell. We showed that AhR expression in CMT167 LUAD cells led to rapid tumor growth following subcutaneous or orthotopic transplantation whereas AhR deletion resulted in slower proliferation and up to complete rejection of tumor cells. AhR knockout also resulted in greater infiltration of CD3+ T cells. T cells from CMT167AhR-KO tumors were characterized by expression of granzyme B and upregulation of genes involved in activated and cytotoxic immune response, while T cells from CMT167WT tumors expressed higher levels of genes associated with T cell exhaustion and non-Th1 phenotypes. In addition, we developed a novel orthotopic model that will allow us to better understand how immune checkpoints from tumor cells modulate the lung TME by tracing the interactions of both myeloid and lymphoid immune cells with malignant cells. Further, in human LUAD cells, we implicated the AhR in the control of a long non-coding RNA shown to promote PD-L1 expression in the presence of IFNγ. Together, these results implicate AhR as a regulator of immune suppression in LUAD through multiple mechanisms and support it as a therapeutic target in the quest to improve immunotherapies.