Cellular ability to mount an enhanced transcriptional response upon repeated exposure to external cues is termed transcriptional memory, which can be maintained epigenetically through cell divisions and can depend on a nuclear pore component Nup98. The majority of mechanistic knowledge on transcriptional memory has been derived from bulk molecular assays. To gain additional perspective on the mechanism and contribution of Nup98 to memory, we used single-molecule RNA FISH (smFISH) to examine the dynamics of transcription in Drosophila cells upon repeated exposure to the steroid hormone ecdysone. We combined smFISH with mathematical modeling and found that upon hormone exposure, cells rapidly activate a low-level transcriptional response, but simultaneously begin a slow transition into a specialized memory state characterized by a high rate of expression. Strikingly, our modeling predicted that this transition between non-memory and memory states is independent of the transcription stemming from initial activation. We confirmed this prediction experimentally by showing that inhibiting transcription during initial ecdysone exposure did not interfere with memory establishment. Together, our findings reveal that Nup98’s role in transcriptional memory is to stabilize the forward rate of conversion from low to high expressing state, and that induced genes engage in two separate behaviors – transcription itself and the establishment of epigenetically propagated transcriptional memory.