Steroid hormones are systemic signaling molecules that regulate juvenile-adult transitions in both insects and mammals. In insects, pulses of the steroid hormone 20-hydroxyecdysone (20E) are generated by increased biosynthesis followed by inactivation/clearance. Although mechanisms that control 20E synthesis have received considerable recent attention, the physiological significance of 20E inactivation remains largely unknown. We show that the cytochrome P450 Cyp18a1 lowers 20E titer during the Drosophila prepupal to pupal transition. Furthermore, this reduction of 20E levels is a prerequisite to induce βFTZ-F1, a key factor in the genetic hierarchy that controls early metamorphosis. Resupplying βFTZ-F1 rescues Cyp18a1-deficient prepupae. Because Cyp18a1 is 20E-inducible, it appears that the increased production of steroid is responsible for its eventual decline, thereby generating the regulatory pulse required for proper temporal progression of metamorphosis. The coupling of hormone clearance to βFTZ-F1 expression suggests a general mechanism by which transient signaling drives unidirectional progression through a multistep process.