Homodimeric class I cytokine receptors are assumed to exist as preformed dimers that are activated by ligand-induced conformational changes. We quantified the dimerization of three prototypic class I cytokine receptors in the plasma membrane of living cells by single-molecule fluorescence microscopy. Spatial and spatiotemporal correlation of individual receptor subunits showed ligand-induced dimerization and revealed that the associated Janus kinase 2 (JAK2) dimerizes through its pseudokinase domain. Oncogenic receptor and hyperactive JAK2 mutants promoted ligand-independent dimerization, highlighting the formation of receptor dimers as the switch responsible for signal activation. Atomistic modeling and molecular dynamics simulations based on a detailed energetic analysis of the interactions involved in dimerization yielded a mechanistic blueprint for homodimeric class I cytokine receptor activation and its dysregulation by individual mutations.