Thresholds are frequently thought to be involved in the development of discrete structures in response to a shallow, monotonic gradient of morphogenetic information. We propose a mechanism for threshold setting that incorporates two essential components: (i) determinator genes that produce intracellular "determinators" that control cellular differentiation during development and (ii) intracellular "inhibitors" that bind tightly and specifically to the determinators to form "determinator-inhibitor pairs" that are inactive with respect to determinator function. The interaction of these components amplifies the intracellular response to an extra-cellular morphogen, thus producing a sharp transition in determinator gene activity. This system could operate at either the RNA level with the determinator-inhibitor pairs taking the form of sense-antisense RNAs or at the protein level via a competitive inhibition mechanism. In either case this model suggests a possible role for pseudogenes in development as a source of the intracellular inhibitors.