The budding yeast mitotic exit network (MEN) is a GTPase-driven signal transduction cascade that controls the release of the phosphatase Cdc14p from the nucleolus in anaphase and thereby drives mitotic exit. We show that Cdc14p is partially released from the nucleolus in early anaphase independent of the action of the MEN components Cdc15p, Dbf2p, and Tem1p. Upon release, Cdc14p binds to the spindle pole body (SPB) via association with the Bfa1p–Bub2p GTPase activating protein complex, which is known to regulate the activity of the G protein Tem1p. Cdc14p also interacts with this GTPase. The association of the MEN component Mob1p with the SPB acts as a marker of MEN activation. The simultaneous binding of Cdc14p and Mob1p to the SPB in early anaphase suggests that Cdc14p initially activates the MEN. In a second, later step, which coincides with mitotic exit, Cdc14p reactivates the Bfa1p–Bub2p complex by dephosphorylating Bfa1p. This inactivates the MEN and displaces Mob1p from SPBs. These data indicate that Cdc14p activates the MEN in early anaphase but later inactivates it through Bfa1p dephosphorylation and so restricts MEN activity to a short period in anaphase.