We studied the influence of two overwintering microenvironments on survival and potential fecundity of goldenrod gall flies, Eurosta solidaginis (Fitch) (Diptera, Tephritidae). These freeze-tolerant larvae overwinter above the snow on standing goldenrod stems (elevated) or below the snow on broken stems (ground-level). When covered by snow, the ground-level larvae were well insulated and thus protected from the lowest temperatures of the winter, but, because they were warmer, they consumed more energy than their elevated counterparts. The ground-level group also experienced greater warming from the soil during sunny spring days, and their galls were less prone to drying than their elevated counterparts. By winter's end the ground-level larvae exhibited significantly lower rates of emergence (83.5% vs 93.0%) and reduced potential fecundity (274±11 eggs/female vs 336±17 eggs/female). Models of seasonal energy use indicate that these differences were due to higher metabolic rates in the ground-level microenvironment due to insulation by snow and warming from the soil, which reduced the energy available for morphological development and egg production in the spring. We conclude that colder winter microenvironments can have a strong positive effect on overwintering ectotherms, particularly those that rely on energy stores accumulated during the autumn to produce eggs in spring. The enhanced reproductive output of insects overwintering in colder microenvironments may be a selective force promoting the evolution of increased cold-hardiness.