Aryl hydrocarbon receptor (AHR) genomic pathway has been well‐characterized in a number of respiratory diseases. In addition, the cytoplasmic AHR protein may act as an adaptor of E3 ubiquitin ligase. In this study, the physiological functions of AHR that regulate cell proliferation were explored using the CRISPR/Cas9 system. The doubling‐time of the AHR‐KO clones of A549 and BEAS‐2B was observed to be prolonged. The attenuation of proliferation potential was strongly associated with either the induction of p27Kip1 or the impairment in mitogenic signal transduction driven by the epidermal growth factor (EGF) and EGF receptor (EGFR). We found that the leucinerich repeats and immunoglobulin‐like domains 1 (LRIG1), a repressor of EGFR, was induced in the absence of AHR in vitro and in vivo. The LRIG1 tends to degrade via a proteasome dependent manner by interacting with AHR in wild‐type cells. Either LRIG1 or a disintegrin and metalloprotease 17 (ADAM17) were accumulated in AHR‐defective cells, consequently accelerating the degradation of EGFR, and attenuating the response to mitogenic stimulation. We also affirmed low AHR but high LRIG1 levels in lung tissues of chronic obstructive pulmonary disease (COPD) patients. This might partially elucidate the sluggish tissue repairment and developing inflammation in COPD patients.