Stimulation of transcription by extracellular signals is a major component of a cell's decision making. Yet the quantitative relationship between signal and acute transcriptional response is unclear. One view is that transcription is directly graded with inducer concentration. In an alternative model, the response occurs only above a threshold inducer concentration. Standard methods for monitoring transcription lack continuous information from individual cells or mask immediate-early transcription by measuring downstream protein expression. We have therefore used a technique for directly monitoring nascent RNA in living cells, to quantify the direct transcriptional response to an extracellular signal in real time, in single cells. At increasing doses of inducer, increasing numbers of cells displayed a transcriptional response. However, over the same range of doses, the change in cell response strength, measured as the length, frequency and intensity of transcriptional pulses, was small, with considerable variation between cells. These data support a model in which cells have different sensitivities to developmental inducer and respond in a digital manner above individual stimulus thresholds. Biased digital responses may be necessary for certain forms of developmental specification. Limiting bias in responsiveness is required to reduce noise in positional signalling.