The behaviour of pyrene and its decomposition by-products in chlorination and their aryl hydrocarbon receptor (AhR) ligand activities were investigated. In the study on pyrene behaviour in chlorination, the pyrene and chlorine concentrations and the pH range were 0.82–21 μg l−1, 2.0–2.1 mg l−1 and 3.2–10, respectively. In the pH range of 3.2–5.1, pyrene was decomposed faster in the order of pH 3.2, 3.7 and 5.1. However, when the pH ranged from 5.1 to 10, pyrene was decomposed faster in a pH range of approximately 7.8–8.8. When the effects of the initial pyrene concentration were investigated, a lower pyrene concentration was decomposed faster. Pyrene decomposition in chlorination was inhibited by the presence of 30 mM ethanol, but was enhanced by the presence of 3.0 and 6.0 mgC l−1 humic acid. Pyrene decomposition by-products in chlorination were also characterized (pyrene, 92 μg l−1; chlorine, 7.9 mg l−1; pH, 7.1). 1-Chloropyrene, 1,6- and 1,8-dichloropyrenes, and pyrene-4,5-dione were identified as pyrene decomposition by-products. 1-Chloropyrene and pyrene-4,5-dione in chlorination were found to be major by-products at pH 3.2, but minor by-products at pH 7.1 (pyrene, 56–67 μg l−1; chlorine, 3.9–4.0 mg l−1). The yeast assay revealed that pyrene-4,5-dione was an AhR agonist.