Phenotypic plasticity – the ability of organisms to express variable forms in response to environmental cues – is increasingly appreciated for its roles in a variety of phenomena, from population persistence in the face of climate change to sparking evolutionary innovations. Plasticity itself clearly has genetic foundations, whereby the genome provides instructions for a typically physiological response. As a result, physiology becomes the proximate developmental mediator between the environment and an individual’s phenotypic expression. This chapter, focusing mostly on endocrine systems, reviews the (1) relationship between physiology and plasticity; (2) approaches that have been used to examine the role of physiological divergence in the evolution of plasticity; (3) ways in which physiology can potentially constrain or facilitate the evolution of plasticity; and (4) how the evolution of physiological mechanisms can promote subsequent trait evolution or even speciation. Characterizing the physiological mechanisms underlying plasticity in a comparative framework will yield a clearer picture of how plastic phenotypes evolve and promote the diversification of traits.