Cell polarity is fundamental to the development of both eukaryotes and prokaryotes, yet the mechanisms behind its formation are not well understood. Here we found that, phytohormone auxin-induced, sterol-dependent nanoclustering of cell surface transmembrane receptor kinase 1 (TMK1) is critical for the formation of polarized domains at the plasma membrane (PM) during the morphogenesis of cotyledon pavement cells (PC) in Arabidopsis. Auxin-induced TMK1 nanoclustering stabilizes flotillin1-associated ordered nanodomains, which in turn promote the nanoclustering of ROP6 GTPase that acts downstream of TMK1 to regulate cortical microtubule organization. In turn, cortical microtubules further stabilize TMK1- and flotillin1-containing nanoclusters at the PM. Hence, we propose a new paradigm for polarity formation: A diffusive signal triggers cell polarization by promoting cell surface receptor-mediated nanoclustering of signaling components and cytoskeleton-mediated positive feedback that reinforces these nanodomains into polarized domains.