Why are some traits constitutive and others inducible? The term costs often appears in work addressing this issue but may be ambiguously defined. This review distinguishes two conceptually distinct types of costs: phenotypic costs and plasticity costs. Phenotypic costs are assessed from patterns of covariation, typically between a focal trait and a separate trait relevant to fitness. Plasticity costs, separable from phenotypic costs, are gauged by comparing the fitness of genotypes with equivalent phenotypes within two environments but differing in plasticity and fitness. Subtleties associated with both types of costs are illustrated by a body of work addressing predator-induced plasticity. Such subtleties, and potential interplay between the two types of costs, have also been addressed, often in studies involving genetic model organisms. In some instances, investigators have pinpointed the mechanistic basis of plasticity. In this vein, microbial work is especially illuminating and has three additional strengths. First, information about the machinery underlying plasticity—such as structural and regulatory genes, sensory proteins, and biochemical pathways—helps link population-level studies with underlying physiological and genetic mechanisms. Second, microbial studies involve many generations, large populations, and replication. Finally, empirical estimation of key parameters (e.g., mutation rates) is tractable. Together, these allow for rigorous investigation of gene interactions, drift, mutation, and selection—all potential factors influencing the maintenance or loss of inducible traits along with phenotypic and plasticity costs. Messages emerging from microbial work can guide future efforts to understand the evolution of plastic traits in diverse organisms.