Scaffold proteins modulate signalling pathway activity spatially and temporally. In budding yeast, the scaffold Bem1 contributes to polarity axis establishment by regulating the GTPase Cdc42. Although different models have been proposed for Bem1 function, there is little direct evidence for an underlying mechanism. Here, we find that Bem1 directly augments the guanine exchange factor (GEF) activity of Cdc24. Bem1 also increases GEF phosphorylation by the p21-activated kinase (PAK), Cla4. Phosphorylation abrogates the scaffold-dependent stimulation of GEF activity, rendering Cdc24 insensitive to additional Bem1. Thus, Bem1 stimulates GEF activity in a reversible fashion, contributing to signalling flux through Cdc42. The contribution of Bem1 to GTPase dynamics was borne-out by in vivo imaging: active Cdc42 was enriched at the cell pole in hypophosphorylated cdc24 mutants, while hyperphosphorylated cdc24 mutants that were resistant to scaffold stimulation displayed a deficit in active Cdc42 at the pole. These findings illustrate the self-regulatory properties that scaffold proteins confer on signalling pathways.