Individual cells translate concentration gradients of extracellular factors into all-or-none threshold responses leading to discrete patterns of gene expression. Signaling cascades account for some but not all such threshold responses, suggesting the existence of additional mechanisms. Here we show that all-or-none responses can be generated at a transcriptional level. A graded rheostat mechanism obtained when either transactivators or transrepressors are present is converted to an on/off switch when these factors compete for the same DNA regulatory element. Hill coefficients of dose-response curves confirm that the synergistic responses generated by each factor alone are additive, obviating the need for feedback loops. We postulate that regulatory networks of competing transcription factors prevalent in cells and organisms are crucial for establishing true molecular on/off switches.