Directional cell growth requires that cells read and interpret shallow chemical gradients, but how the gradient directional information is identified remains elusive. We use single-cell analysis and mathematical modeling to define the cellular gradient decoding network in yeast. Our results demonstrate that the spatial information of the gradient signal is read locally within the polarity site complex using double-positive feedback between the GTPase Cdc42 and trafficking of the receptor Ste2. Spatial decoding critically depends on low Cdc42 activity, which is maintained by the MAPK Fus3 through sequestration of the Cdc42 activator Cdc24. Deregulated Cdc42 or Ste2 trafficking prevents gradient decoding and leads to mis-oriented growth. Our work discovers how a conserved set of components assembles a network integrating signal intensity and directionality to decode the spatial information contained in chemical gradients.