The early events in signal transduction from the epidermal growth factor (EGF) receptor (EGFR) are dimerization and autophosphorylation of the receptor, induced by binding of EGF. Here we observe these events in living cells by visualizing single molecules of fluorescent-dye-labelled EGF in the plasma membrane of A431 carcinoma cells. Single-molecule tracking reveals that the predominant mechanism of dimerization involves the formation of a cell-surface complex of one EGF molecule and an EGFR dimer, followed by the direct arrest of a second EGF molecule, indicating that the EGFR dimers were probably preformed before the binding of the second EGF molecule. Single-molecule fluorescence-resonance energy transfer shows that EGF-EGFR complexes indeed form dimers at the molecular level. Use of a monoclonal antibody specific to the phosphorylated (activated) EGFR reveals that the EGFR becomes phosphorylated after dimerization.