Diverse physiological processes are regulated differentially by Ca(2+) oscillations through the common regulatory hub calmodulin. The capacity of calmodulin to combine specificity with promiscuity remains to be resolved. Here we propose a mechanism based on the molecular properties of calmodulin, its two domains with separate Ca(2+) binding affinities, and target exchange rates that depend on both target identity and Ca(2+) occupancy. The binding dynamics among Ca(2+), Mg(2+), calmodulin, and its targets were modeled with mass-action differential equations based on experimentally determined protein concentrations and rate constants. The model predicts that the activation of calcineurin and nitric oxide synthase depends nonmonotonically on Ca(2+)-oscillation frequency. Preferential activation reaches a maximum at a target-specific frequency. Differential activation arises from the accumulation of inactive calmodulin-target intermediate complexes between Ca(2+) transients. Their accumulation provides the system with hysteresis and favors activation of some targets at the expense of others. The generality of this result was tested by simulating 60 000 networks with two, four, or eight targets with concentrations and rate constants from experimentally determined ranges. Most networks exhibit differential activation that increases in magnitude with the number of targets. Moreover, differential activation increases with decreasing calmodulin concentration due to competition among targets. The results rationalize calmodulin signaling in terms of the network topology and the molecular properties of calmodulin.