The yeast transcription factor Ste12 controls both mating and filamentation pathways. Upon pheromone induction, the mitogen-activated protein kinases, Fus3 and Kss1, activate Ste12 by relieving the repression of two functionally redundant Ste12 inhibitors, Dig1 and Dig2. Mating genes are controlled by the Ste12/Dig1/Dig2 complex through Ste12-binding sites, whereas filamentation genes are regulated by the Tec1/Ste12/Dig1 complex through Tec1-binding sites. The two Ste12 complexes are mutually exclusive. During pheromone response, Tec1 is degraded upon phosphorylation by Fus3, preventing cross-activation of the filamentation pathway. Here, we show that a stable Tec1 also impairs the induction of mating genes. A mathematical model is developed to capture the dynamic formation of the two Ste12 complexes and their interactions with pathway-specific promoters. By model simulations and experimentation, we show that excess Tec1 can impair the mating transcriptional output because of its ability to sequester Ste12, and because of a novel function of Dig2 for the transcription of mating genes. We suggest that Fus3-triggered Tec1 degradation is an important part of the transcriptional induction of mating genes during the pheromone response.