Interactions between genes and proteins are crucial for efficient processing of internal or external signals, but this connectivity also amplifies stochastic fluctuations by propagating noise between components. Linear (unbranched) cascades were shown to exhibit an interplay between the sensitivity to changes in input signals and the ability to buffer noise. We searched for biological circuits that can maintain signaling sensitivity while minimizing noise propagation, focusing on cases where the noise is characterized by rapid fluctuations. Negative feedback can buffer this type of noise, but this buffering comes at the expense of an even greater reduction in signaling sensitivity. By systematically analyzing three-component circuits, we identify positive feedback as a central motif allowing for the buffering of propagated noise while maintaining sensitivity to long-term changes in input signals. We show analytically that noise reduction in the presence of positive feedback results from improved averaging of rapid fluctuations over time, and discuss in detail a particular implementation in the control of nutrient homeostasis in yeast. As the design of biological networks optimizes for multiple constraints, positive feedback can be used to improve sensitivity without a compromise in the ability to buffer propagated noise.