Signaling from JAK (Janus kinase) protein kinases to STAT (signal transducers and activators of transcription) transcription factors is key to many aspects of biology and medicine, yet the mechanism by which cytokine receptors initiate signaling is enigmatic. We present a complete mechanistic model for activation of receptor-bound JAK2, based on an archetypal cytokine receptor, the growth hormone receptor. For this, we used fluorescence resonance energy transfer to monitor positioning of the JAK2 binding motif in the receptor dimer, substitution of the receptor extracellular domains with Jun zippers to control the position of its transmembrane (TM) helices, atomistic modeling of TM helix movements, and docking of the crystal structures of the JAK2 kinase and its inhibitory pseudokinase domain with an opposing kinase-pseudokinase domain pair. Activation of the receptor dimer induced a separation of its JAK2 binding motifs, driven by a ligand-induced transition from a parallel TM helix pair to a left-handed crossover arrangement. This separation leads to removal of the pseudokinase domain from the kinase domain of the partner JAK2 and pairing of the two kinase domains, facilitating trans-activation. This model may well generalize to other class I cytokine receptors.