The abnormal activation of epidermal growth factor receptor (EGFR) is strongly associated with a variety of human cancers but the underlying molecular mechanism is not fully understood. By using direct stochastic optical reconstruction microscopy (dSTORM), we find that EGFR proteins form nanoclusters in the cell membrane of both normal lung epithelial cells and lung cancer cells, but the number and size of clusters significantly increase in lung cancer cells. The formation of EGFR clusters is mediated by the ionic interaction between the anionic lipid phosphatidylinositol-4,5-bisphosphate (PIP2) in the plasma membrane and the juxtamembrane (JM) region of EGFR. Disruption of EGFR clustering by PIP2 depletion or JM region mutation impairs EGFR activation and downstream signaling. Furthermore, JM region mutation in constitutively active EGFR mutant attenuates its capability of cell transformation. Collectively, our findings highlight the key roles of anionic phospholipids in EGFR signaling and function, and reveal a novel mechanism to explain the aberrant activation of EGFR in cancers.