Brassinosteroids (BRs) are essential steroid hormones that have crucial roles in plant growth and development. BRs are perceived by the cell-surface receptor-like kinase brassinosteroid insensitive 1 (BRI1). In the absence of BRs, the cytosolic kinase domain (KD) of BRI1 is inhibited by its auto-inhibitory carboxyl terminus, as well as by interacting with an inhibitor protein, BRI1 kinase inhibitor 1 (BKI1). How BR binding to the extracellular domain of BRI1 leads to activation of the KD and dissociation of BKI1 into the cytosol remains unclear. Here we report the crystal structure of BRI1 KD in complex with the interacting peptide derived from BKI1. We also provide biochemical evidence that BRI1-associated kinase 1 (BAK1) plays an essential role in initiating BR signaling. Steroid-dependent heterodimerization of BRI1 and BAK1 ectodomains brings their cytoplasmic KDs in the right orientation for competing with BKI1 and transphosphorylation.