Deregulated extracellular signal-regulated kinase (ERK) signaling drives cancer growth. Normally, ERK activity is self-limiting by the rapid inactivation of upstream kinases and delayed induction of dual-specificity MAP kinase phosphatases (MKPs/DUSPs). However, interactions between these feedback mechanisms are unclear. Here we show that, although theMKP DUSP5 both inactivates and anchors ERK in the nucleus, it paradoxically increases and prolongs cytoplasmic ERK activity. The latter effect is caused, at least in part, by the relief of ERK-mediated RAF inhibition. The importance of this spatiotemporal interaction between these distinct feedback mechanisms is illustrated by the fact that expression of oncogenic BRAFV600E, a feedback-insensitive mutant RAF kinase, reprograms DUSP5 into a cell-wide ERK inhibitor that facilitates cell proliferation and transformation. In contrast, DUSP5 deletion causes BRAFV600E-induced ERK hyperactivation and cellular senescence. Thus, feedback interactions within the ERK pathway can regulate cell proliferation and transformation, and suggest oncogene-specific roles for DUSP5 in controlling ERK signaling and cell fate.