First-generation RAF inhibitors paradoxically induce ERK signaling in normal and tumor cells exhibiting RAS activity. Compound-induced RAF dimerization through stabilization of the RAF ON/active state by inhibitors has emerged as a critical contributing factor. RAF inhibitors also enhance RAS-RAF association. Although this event is thought to play a key role in priming RAF activation, the underlying mechanism is not known. Here we report that RAF inhibitors induce the disruption of intramolecular interactions between the kinase domain and its N-terminal regulatory region independently of RAS activity. This provides a molecular basis to explain the induction of RAS-RAF association by RAF inhibitors, as well as the co-operativity observed between RAS activity and RAF kinase inhibitors in driving RAF activation. Profiling of second-generation RAF inhibitors confirmed their improved mode of action, but also revealed liabilities that allowed us to discern two properties of an ideal RAF inhibitor: high-binding affinity to all RAF paralogs and maintenance of the OFF/autoinhibited state of the enzyme.