Fibrodysplasia ossificans progressiva (FOP) and diffuse intrinsic pontine glioma (DIPG) are debilitating diseases that share causal mutations in ACVR1, a TGF-β family type I receptor. ACVR1 is a frequent mutation in both diseases. Pathogenic signaling via the SMAD1/5 pathway is mediated by Activin A, but how the mutation triggers aberrant signaling is not known. We show that ACVR1 is essential for Activin A-mediated SMAD1/5 phosphorylation and is activated by two distinct mechanisms. Wild-type ACVR1 is activated by the Activin type I receptors, ACVR1B/C. In contrast, ACVR1 activation does not require upstream kinases, but is predominantly activated via Activin A-dependent receptor clustering, which induces its auto-activation. We use optogenetics and live-imaging approaches to demonstrate Activin A-induced receptor clustering and show it requires the type II receptors ACVR2A/B. Our data provide molecular mechanistic insight into the pathogenesis of FOP and DIPG by linking the causal activating genetic mutation to disrupted signaling.