Alpine environments are particularly susceptible to environmental changes associated with global warming but there is potential for alpine plants to adapt to warming if local adaptation occurs and gene flow allows genotypes adapted to low altitudes to colonize higher altitude sites. Here we examine the adaptive potential of a common alpine grass, Poa hiemata, within the restricted alpine habitat of Australian mountains, across a narrow altitudinal gradient replicated in three areas. Grasses at high altitude sites had shorter leaf lengths and larger circumferences than those at lower sites. Transplant experiments with clonal material and plants grown from seed indicated that these differences were partly genetic, with environmental and genetic factors both contributing to the differences between altitudes. Differences in altitudinal forms were also evident in a common garden experiment. Plants showed a home-site advantage in terms of survival. A fitness analysis indicated that at high altitude sites, selection favored plants with short leaves and larger circumferences, whereas these traits were selected in the opposite direction at the low altitude sites. These findings indicate cogradient selection and potential for both plastic and genotypic shifts in response to climate change in P. hiemata.