Aberrant signal transduction pathways can adversely derail developmental processes. One such process is embryonic eyelid closure that requires MAP3K1. Map3k1 knockout mice have defective eyelid closure and an autosomal recessive eye-open at birth phenotype. In utero exposure to dioxin, a persistent environmental toxicant, causes the same eye defect in Map3k1+/- hemizygous but not wild type pups. Here we explore the mechanisms of Map3k1 (gene) and dioxin (environment) interactions (GxE) in the tissue closure defect. We show that, acting through the AHR, dioxin activates EGFR signaling, which in turn depresses MAP3K1-dependent JNK activity. This effect of dioxin is exacerbated by Map3k1 heterozygosity. Therefore, dioxin exposed Map3k1+/- embryonic eyelids have a marked reduction of JNK activity, accelerated differentiation and impeded polarization in the epithelial cells. Knocking out Ahr or Egfr in eyelid epithelium attenuates the open-eye defects in dioxin-treated Map3k1+/- pups, whereas knockout of Jnk1 and S1pr, encoding the S1P receptors upstream of the MAP3K1-JNK pathway, potentiates dioxin toxicity. Our novel findings suggest that dioxin and genes of the AHR, EGFR and S1P-MAP3K1-JNK pathways constitute a multifactorial mechanism underlying tissue closure abnormalities.