The insulin receptor (IR) and insulin-like growth factor-1 receptor (IGF1R) are highly related receptor tyrosine kinases with a disulfide-linked homodimeric architecture. Ligand binding to the receptor ectodomain triggers tyrosine autophosphorylation of the cytoplasmic domains, which stimulates catalytic activity and creates recruitment sites for downstream signalling proteins. Whether the two phosphorylated tyrosine kinase domains within the receptor dimer function independently or cooperatively to phosphorylate protein substrates is not known. Here we provide crystallographic, biophysical and biochemical evidence demonstrating that the phosphorylated kinase domains of IR and IGF1R form a specific dimeric arrangement involving an exchange of the juxtamembrane region proximal to the kinase domain. In this dimer, the active position of α-helix C in the kinase N lobe is stabilized, which promotes downstream substrate phosphorylation. These studies afford a novel strategy for the design of small-molecule IR agonists as potential therapeutic agents for type 2 diabetes.