The prolactin receptor (PRLR) is activated by binding of prolactin in a 2:1 complex, but the activation mechanism is poorly understood. PRLR has a conserved WSXWS motif generic to cytokine class I receptors. We have determined the nuclear magnetic resonance solution structure of the membrane proximal domain of the human PRLR and find that the tryptophans of the motif adopt a T-stack conformation in the unbound state. By contrast, in the hormone bound state, a Trp/Arg-ladder is formed. The conformational change is hormone-dependent and influences the receptor-receptor dimerization site 3. In the constitutively active, breast cancer-related receptor mutant PRLR(I146L), we observed a stabilization of the dimeric state and a change in the dynamics of the motif. Here we demonstrate a structural link between the WSXWS motif, hormone binding, and receptor dimerization and propose it as a general mechanism for class 1 receptor activation.