Dimerization-driven activation of the intracellular kinase domains of the epidermal growth factor receptor (EGFR) upon extracellular ligand binding is crucial to cellular pathways regulating proliferation, migration, and differentiation. Inactive EGFR can exist as both monomers and dimers, suggesting that the mechanism regulating EGFR activity may be subtle. The membrane itself may play a role but creates substantial difficulties for structural studies. Our molecular dynamics simulations of membrane-embedded EGFR suggest that, in ligand-bound dimers, the extracellular domains assume conformations favoring dimerization of the transmembrane helices near their N termini, dimerization of the juxtamembrane segments, and formation of asymmetric (active) kinase dimers. In ligand-free dimers, by holding apart the N termini of the transmembrane helices, the extracellular domains instead favor C-terminal dimerization of the transmembrane helices, juxtamembrane segment dissociation and membrane burial, and formation of symmetric (inactive) kinase dimers. Electrostatic interactions of EGFR’s intracellular module with the membrane are critical in maintaining this coupling.