The human epidermal growth factor receptor (EGFR) is a key representative of tyrosine kinase receptors, ubiquitous actors in cell signaling, proliferation, differentiation, and migration. Although the receptor is well-studied, a central issue remains: How does the compositional diversity and functional diversity of the surrounding membrane modulate receptor function? Reconstituting human EGFR into proteoliposomes of well-defined and controlled lipid compositions represents a minimal synthetic approach to systematically address this question. We show that lipid composition has little effect on ligand-binding properties of the EGFR but rather exerts a profound regulatory effect on kinase domain activation. Here, the ganglioside GM3 but not other related lipids strongly inhibited the autophosphorylation of the EGFR kinase domain. This inhibitory action of GM3 was only seen in liposomes compositionally poised to phase separate into coexisting liquid domains. The inhibition by GM3 was released by either removing the neuraminic acid of the GM3 headgroup or by mutating a membrane proximal lysine of EGFR (K642G). Our results demonstrate that GM3 exhibits the potential to regulate the allosteric structural transition from inactive to a signaling EGFR dimer, by preventing the autophosphorylation of the intracellular kinase domain in response to ligand binding.