C. elegans ahr-1 is orthologous to the mammalian aryl hydrocarbon receptor, and it functions as a transcription factor to regulate the development of certain neurons. Here, we describe the role of ahr-1 in a specific behavior: the aggregation of C. elegans on lawns of bacterial food. This behavior is modulated by nutritional cues and ambient oxygen levels, and aggregation is inhibited by the npr-1 G protein-coupled neuropeptide receptor gene. Loss-of-function mutations in ahr-1 or its transcription partner aha-1 (ARNT) suppress aggregation behavior in npr-1-deficient animals. This behavioral defect is not irreparable. Aggregation behavior can be restored to ahr-1-deficient animals by heat-shock induction of ahr-1 transcription several hours after ahr-1-expressing neurons have normally differentiated. We show that ahr-1 and aha-1 promote cell-type-specific expression of soluble guanylate cyclase genes that have key roles in aggregation behavior and hyperoxia avoidance. Aggregation behavior can be partially restored to ahr-1 mutant animals by expression of ahr-1 in only 4 neurons, including URXR and URXL. We conclude that the AHR-1:AHA-1 transcription complex regulates the expression of soluble guanylate cyclase genes and other unidentified genes that are essential for acute regulation of aggregation behavior.