Phenotype switching is commonly observed in nature. This prevalence has allowed the elucidation of a number of underlying molecular mechanisms. However, little is known about how phenotypic switches arise and function in their early evolutionary stages. The first opportunity to provide empirical insight was delivered by an experiment in which populations of the bacterium Pseudomonas fluorescens SBW25 evolved, de novo, the ability to switch between two colony phenotypes. Here we unravel the molecular mechanism behind colony switching, revealing how a single nucleotide change in a gene enmeshed in central metabolism (carB) generates such a striking phenotype. We show that colony switching is underpinned by ON/OFF expression of capsules consisting of a colanic acid-like polymer. We use molecular genetics, biochemical analyses, and experimental evolution to establish that capsule switching results from perturbation of the pyrimidine biosynthetic pathway. Of central importance is a bifurcation point at which uracil triphosphate is partitioned towards either nucleotide metabolism or polymer production. This bifurcation marks a cell-fate decision point whereby cells with relatively high pyrimidine levels favour nucleotide metabolism (capsule OFF), while cells with lower pyrimidine levels divert resources towards polymer biosynthesis (capsule ON). This decision point is present and functional in the wild-type strain. Finally, we present a simple mathematical model demonstrating that the molecular components of the decision point are capable of producing switching. Despite its simple mutational cause, the connection between genotype and phenotype is complex and multidimensional, offering a rare glimpse of how noise in regulatory networks can provide opportunity for evolution.