The catalytic activation of protein kinases requires precise positioning of key conserved catalytic and regulatory motifs in the kinase core. The Regulatory Spine (RS) is one such structural motif that is dynamically assembled upon kinase activation. The RS is also a mutational hotspot in cancers; however, the mechanisms by which cancer mutations impact RS assembly and kinase activity are not fully understood. In this study, through mutational analysis of patient derived mutations in the RS of EGFR kinase, we identify an activating mutation, M766T, at the RS3 position. RS3 is located in the regulatory αC-helix, and a series of mutations at the RS3 position suggest a strong correlation between the amino acid type present at the RS3 position and ligand (EGF) independent EGFR activation. Small polar amino acids increase ligand independent activity, while large aromatic amino acids decrease kinase activity. M766T relies on the canonical asymmetric dimer for full activation. Molecular modeling and molecular dynamics simulations of WT and mutant EGFR suggest a model in which M766T activates the kinase domain by disrupting conserved autoinhibitory interactions between M766 and hydrophobic residues in the activation segment. In addition, a water mediated hydrogen bond network between T766, the conserved K745-E762 salt bridge, and the backbone amide of the DFG motif is identified as a key determinant of M766T-mediated activation. M766T is resistant to FDA approved EGFR inhibitors such as gefitinib and erlotinib, and computational estimation of ligand binding free energy identifies key residues associated with drug sensitivity. In sum, our studies suggest an unusual mode of RS assembly and oncogenic EGFR activation, and provide new clues for the design of allosteric protein kinase inhibitors.