Aside from its selective role in filtering inter-individual variation during evolution by natural selection, the environment also plays an instructive role in producing variation during development. External environmental cues can influence developmental rates and/or trajectories and lead to the production of distinct phenotypes from the same genotype. This can result in a better match between adult phenotype and selective environment and thus represents a potential solution to problems posed by environmental fluctuation. The phenomenon is called adaptive developmental plasticity. The study of developmental plasticity integrates different disciplines (notably ecology and developmental biology) and analyses at all levels of biological organization, from the molecular regulation of changes in organismal development to variation in phenotypes and fitness in natural populations. Here, we focus on recent advances and examples from morphological traits in animals to provide a broad overview covering (i) the evolution of developmental plasticity, as well as its relevance to adaptive evolution, (ii) the ecological significance of alternative environmentally induced phenotypes, and the way the external environment can affect development to produce them, (iii) the molecular mechanisms underlying developmental plasticity, with emphasis on the contribution of genetic, physiological and epigenetic factors, and (iv) current challenges and trends, including the relevance of the environmental sensitivity of development to studies in ecological developmental biology, biomedicine and conservation biology.