It is now recognized that molecular circuits with positive feedback can induce two different gene expression states (bistability) under the very same cellular conditions. Whether, and how, cells make use of the coexistence of a larger number of stable states (multistability) is however largely unknown. Here, we first examine how autoregulation, a common attribute of genetic master regulators, facilitates multistability in two-component circuits. A systematic exploration of these modules' parameter space reveals two classes of molecular switches, involving transitions in bistable (progression switches) or multistable (decision switches) regimes. We demonstrate the potential of decision switches for multifaceted stimulus processing, including strength, duration, and flexible discrimination. These tasks enhance response specificity, help to store short-term memories of recent signaling events, stabilize transient gene expression, and enable stochastic fate commitment. The relevance of these circuits is further supported by biological data, because we find them in numerous developmental scenarios. Indeed, many of the presented information-processing features of decision switches could ultimately demonstrate a more flexible control of epigenetic differentiation.