Cells polarize their growth or movement in many different physiological contexts. A key driver of polarity is the Rho GTPase Cdc42, which when activated becomes clustered or concentrated at polar sites. Multiple models for polarity establishment have been proposed. All of them rely on positive feedback to reinforce regions of high Cdc42 activity. Positive feedback can lead to bistability, a scenario in which cells can exist in either a polarized or unpolarized state under identical external conditions. Determining if the signaling circuit that drives Cdc42 polarity is bistable would provide important information about the mechanism that underlies polarity establishment and insights into the design features required for proper cellular function. We studied polarity establishment during the mating response of yeast. Using microfluidics to precisely control the temporal profile of mating pheromone and live-cell imaging to monitor the polarity process in single living cells, we found that the polarity circuit of yeast shows hysteresis, a characteristic feature of bistable systems. Our analysis also revealed that cells exposed to high pheromone concentrations rapidly lose polarity following a precipitous removal of pheromone. We used a reaction-diffusion model for polarity establishment to demonstrate that delayed negative regulation is sufficient to explain our experimental results. [Media: see text] [Media: see text] [Media: see text] [Media: see text].