Recent evidence suggests that the EGF receptor oligomerizes or clusters in cells even in the absence of agonist ligand. To assess the status of EGF receptors in live cells, an EGF receptor fused to eGFP was stably expressed in CHO cells and studied using fluorescence correlation spectroscopy and fluorescent brightness analysis. By modifying FIDA for use in a two-dimensional system with quantal brightnesses, a method was developed to quantify the degree of clustering of the receptors on the cell surface. The analysis demonstrates that under physiological conditions, the EGF receptor exists in a complex equilibrium involving single molecules and clusters of two or more receptors. Acute depletion of cellular cholesterol enhanced EGF receptor clustering whereas cholesterol loading decreased receptor clustering, indicating that receptor aggregation is sensitive to the lipid composition of the membrane.