Epidermal growth factor receptor (EGFR) is a type I receptor tyrosine kinase, the deregulation of which has been implicated in a variety of human carcinomas^,,,. EGFR signalling is preceded by receptor dimerization, typically thought to result from a ligand-induced conformational change in the ectodomain that exposes a loop (dimerization arm) required for receptor association. Ligand binding may also trigger allosteric changes in the cytoplasmic domain of the receptor that is crucial for signalling^,,. Despite these insights, ensemble-averaging approaches have not determined the precise mechanism of receptor activation in situ. Using quantum-dot-based optical tracking of single molecules^,,, combined with a novel time-dependent diffusivity analysis, here we present the dimerization dynamics of individual EGFRs on living cells. Before ligand addition, EGFRs spontaneously formed finite-lifetime dimers kinetically stabilized by their dimerization arms^,,. The dimers were primed both for ligand binding and for signalling, such that after EGF addition they rapidly showed a very slow diffusivity state that correlated with activation. Although the kinetic stability of unliganded dimers was in principle sufficient for EGF-independent activation, ligand binding was still required for signalling. Interestingly, dimers were enriched in the cell periphery in an actin- and receptor-expression-dependent fashion, resulting in a peripheral enhancement of EGF-induced signalling that may enable polarized responses to growth factors.