Cellular signaling networks are subject to transcriptional and proteolytic regulation under both physiological and pathological conditions. For example, the expression of proteins subject to covalent modification by phosphorylation is known to be altered upon cellular differentiation or during carcinogenesis. However, it is unclear how moderate alterations in protein expression can bring about large changes in signal transmission as, for example, observed in the case of haploinsufficiency, where halving the expression of signaling proteins abrogates cellular function. By modeling a fundamental motif of signal transduction, the phosphorylation-dephosphorylation cycle, we show that minor alterations in the concentration of the protein subject to phosphorylation (or the phosphatase) can affect signal transmission in a highly ultrasensitive fashion. This ultrasensitization is strongly favored by substrate sequestration on the catalyzing enzymes, and can be observed with experimentally measured enzymatic rate constants. Furthermore, we show that coordinated transcription of multiple proteins (i.e., synexpression) within a protein kinase cascade results in even more pronounced all-or-none behavior with respect to signal transmission. Finally, we demonstrate that ultrasensitization can account for specificity and modularity in the regulation of cellular signal transduction. Ultrasensitization can result in all-or-none cell-fate decisions and in highly specific cellular regulation. Additionally, switch-like phenomena such as ultrasensitization are known to contribute to bistability, oscillations, noise reduction, and cellular heterogeneity.