The extracellular signal-regulated kinase (ERK) pathway is an essential component of developmental signaling in metazoans. Previous models of pathway activation suggested that dissociation of activated dually phosphorylated ERK (dpERK) from MAPK/ERK kinase (MEK), a kinase that phosphorylates ERK, and other cytoplasmic anchors, is sufficient for allowing ERK interactions with its substrates. Here, we provide evidence for an additional step controlling ERK's access to substrates. Specifically, we demonstrate that interaction of ERK with its substrate Capicua (Cic) is controlled at the level of ERK phosphorylation, whereby Cic binds to dpERK much stronger than to unphosphorylated ERK, both in vitro and in vivo. Mathematical modeling suggests that the differential affinity of Cic for dpERK versus ERK is required for both down-regulation of Cic and stabilizing phosphorylated ERK. Preferential association of Cic with dpERK serves two functions: it prevents unproductive competition of Cic with unphosphorylated ERK and contributes to efficient signal propagation. We propose that high-affinity substrate binding increases the specificity and efficiency of signal transduction through the ERK pathway.