The type II class of RAF inhibitors currently in clinical trials paradoxically activate BRAF at subsaturating concentrations. Activation is mediated by induction of BRAF dimers, but why activation rather than inhibition occurs remains unclear. Using biophysical methods tracking BRAF dimerization and conformation we built an allosteric model of inhibitor-induced dimerization that resolves the allosteric contributions of inhibitor binding to the two active sites of the dimer, revealing key differences between type I and type II RAF inhibitors. For type II inhibitors the allosteric coupling between inhibitor binding and BRAF dimerization is distributed asymmetrically across the two dimer binding sites, with binding to the first site dominating the allostery. This asymmetry results in efficient and selective induction of dimers with one inhibited and one catalytically active subunit. Our allosteric models quantitatively account for paradoxical activation data measured for 11 RAF inhibitors. Unlike type II inhibitors, type I inhibitors lack allosteric asymmetry and do not activate BRAF homodimers. Finally, NMR data reveal that BRAF homodimers are dynamically asymmetric with only one of the subunits locked in the active αC-in state. This provides a structural mechanism for how binding of only a single αC-in inhibitor molecule can induce potent BRAF dimerization and activation.