The behaviour of Dictyostelium discoideum depends on nutrients(1). When sufficient food is present these amoebae exist in a unicellular state, but upon starvation they aggregate into a multicellular organism(2,3). This biology makes D. discoideum an ideal model for investigating how fundamental metabolism commands cell differentiation and function. Here we show that reactive oxygen species-generated as a consequence of nutrient limitation-lead to the sequestration of cysteine in the antioxidant glutathione. This sequestration limits the use of the sulfur atom of cysteine in processes that contribute to mitochondrial metabolism and cellular proliferation, such as protein translation and the activity of enzymes that contain an iron-sulfur cluster. The regulated sequestration of sulfur maintains D. discoideum in a nonproliferating state that paves the way for multicellular development. This mechanism of signalling through reactive oxygen species highlights oxygen and sulfur as simple signalling molecules that dictate cell fate in an early eukaryote, with implications for responses to nutrient fluctuations in multicellular eukaryotes.