Dynamic dimerization is a common regulatory interaction between biological molecules, underpinning many signaling functions. Because of its ubiquity, many biological engineering efforts have focused on building dimerizing proteins, such as the SYNZIPs and de novo Designed HeteroDimers (DHDs). Using the DHDs as a model system, we show that low-affinity protein interactions can be competitively displaced by a high-affinity "dominant negative" heterodimer. We demonstrate the utility of this signaling motif by using competitive displacement to implement negative feedback in a synthetic circuit. Competitive displacement could be extended to other heterodimer systems to expand the functionality of protein circuits and enable new biotechnology applications.