Cell polarization is a prerequisite for essential processes such as cell migration, proliferation or differentiation. The yeast Saccharomyces cerevisiae under control of the GTPase Cdc42 is able to polarize without the help of cytoskeletal structures and spatial cues through a pathway depending on its guanine nucleotide dissociation inhibitor (GDI) Rdi1. To develop a fundamental understanding of yeast polarization we establish a detailed mechanistic model of GDI-mediated polarization. We show that GDI-mediated polarization provides precise spatial and temporal control of Cdc42 signaling and give experimental evidence for our findings. Cell cycle induced changes of Cdc42 regulation enhance positive feedback loops of active Cdc42 production, and thereby allow simultaneous switch-like regulation of focused polarity and Cdc42 activation. This regulation drives the direct formation of a unique polarity cluster with characteristic narrowing dynamics, as opposed to the previously proposed competition between transient clusters. As the key components of the studied system are conserved among eukaryotes, we expect our findings also to apply to cell polarization in other organisms. 