The epidermal growth factor receptor (EGFR) plays an important role in many types of human cancers. Receptor amplification, autocrine activation and/or deletion of exons 2-7 of EGFR gene have all been associated with tumor development. The traditional model of EGFR activation via ligand induced dimerization and consequential kinase activation does not provide full understanding of its tumorigenicity. The main function of the receptor extracellular domain (ECD) has been thought to be ligand recognition and binding. We report that the EGFR ECD, through its association also negatively regulates the activity of the intracellular kinase in the absence of ligand. Even in the absence of its ligands, the EGF receptor forms homodimers, however, the ECD prevents constitutive receptor kinase activation through its intrinsic ligand-independent interaction. The removal of this domain, either partial or total, results in constitutive activation of the receptor kinase as observed by its phosphorylation in intact cells. Furthermore, EGF receptors truncated in the ECD induce phosphorylation of the wild-type full-length receptor, indicating an inter-molecular inhibitory mechanism by the receptor ECD. The tumor associated delta2-7EGFR mutant also dimerizes with and phosphorylates the wild type EGFR in the absence of ligand. Thus, in addition to its role in ligand recognition, EGFR ECD interacts with each other, imposing an inhibitory effect on the activation of the intracellular kinase.