Exposure to diesel exhaust particles (DEPs), which are major constituents of urban air pollution, is associated with adverse health outcomes. Previous studies have shown that DEPs enhance the expression of pro-inflammatory cytokines and immune responses. However, few studies have focused on genomic variants that regulate DEP-induced signaling. Here, we identify a frequently found genomic variant, ACP5, in allergic diseases, and establish an ACP5 knock-out (KO) human bronchial epithelial cell line (BEAS-2B) using CRISPR/Cas9 editing to mimic the ACP5 mutation. DEP-induced apoptosis and intracellular reactive oxygen species (ROS) were significantly increased in the ACP5 KO cells compared with controls, suggesting that ACP5 KO cells were at increased risk from DEP exposure. A gene expression profile revealed an activated aryl hydrocarbon receptor (AHR)-CYP1A1 axis followed by upregulated pro-inflammatory signaling. Treatment of a DEP-exposed ACP5 KO BEAS-2B conditioned medium (CM) supernatant induced an inflammatory response and tissue damage in mice, and AHR inhibition effectively prevented inflammation-induced damage, suggesting that AHR-CYP1A1-inflammatory signaling is a prominent mechanism responsible for detrimental effects. Collectively, our findings reveal a novel link between ACP5 KO and the AHR-CYP1A1 inflammatory signaling pathway in DEP-exposed cells, and identify the AHR-CYP1A1 axis as a potential therapeutic target in individuals suffering from DEP-induced toxicity, particularly those with ACP5 mutations.