Environmental arsenic (As³⁺) exposure poses a significant public health concern due to its carcinogenic potential. Our previous research suggests that As³⁺-induced carcinogenesis is mediated by inhibition of the aryl hydrocarbon receptor (AHR). However, the precise role of AHR in As³⁺-induced malignant transformation as well as cancer stem-like cell (CSC) formation, along with its underlying mechanisms, remains unclear. In this study, we used BEAS-2B cells with CRISPR-Cas9 gene editing, RNA sequencing, and immunoprecipitation to examine AHR's role in As³⁺-induced CSC development. Our findings reveal that AHR suppresses CSC formation triggered by low-dose As³⁺ (0.5 μM) via transcriptional repression of TOX, a high mobility group box DNA binding protein that play a critical role in T cell exhaustion within tumor immunology. TOX knockdown inhibited CSC formation, while its overexpression enhanced cMYC, a CSC-associated transcription factor. TOX interactome analysis identified associations with proteins such as KCTD10, TRIM21, HMGA1, FLOT1, and FLOT2, which may regulate TOX's stability and activity. Enrichment analyses highlighted their involvement in cancer-related pathways, supporting the role of TOX in promoting CSC formation during As³⁺-induced carcinogenesis. Notably, this study identifies TOX as an oncogenic factor in non-immunological contexts and underscores AHR's tumor-suppressive function through TOX repression, offering novel insights into the mechanisms underlying As³⁺-induced carcinogenesis.