Nemo-like kinase (NLK) is an evolutionarily conserved protein kinase that phosphorylates several transcription factors. However, the molecular mechanisms that regulate NLK activity have been poorly understood. Here we show that homodimerization of NLK is required for its activation and nuclear localization. Biochemical analysis revealed that NLK is activated through intermolecular autophosphorylation of NLK dimers at Thr-286. Mutation of NLK at Cys-425, which corresponds to the defect in the Caenorhabditis elegans NLK homologue lit-1, prevented NLK dimerization, rendering NLK defective in both nuclear localization and kinase activity. By contrast, the external addition of nerve growth factor, which has been previously identified as an NLK activator, induced dimerization and Thr-286 autophosphorylation of endogenous NLK proteins. In addition, both dimerization and Thr-286 phosphorylation of NLK were found to be essential for induction of neurite-like cellular processes by NLK. The present findings suggest that dimerization is an initial key event required for the functional activation of NLK.