This chapter reviews the ecological conditions that favor the evolution of plasticity, and the costs and limits that constrain the evolution of plasticity. Variable environments tend to select for plasticity, especially when there are reliable cues of future environmental conditions. However, organismal biology also shapes how individuals experience environmental variation and the reliability of cues, creating opportunities for feedbacks in the evolution of plasticity. Constant environments can also select for plasticity when these environments are novel, or incredibly divergent from ancestral conditions, but such selection should be transient, especially if there are associated costs of plasticity. Empirical studies have documented costs associated with both the induction of plastic traits and the ability to be plastic. Such fitness tradeoffs stem from costs of the developmental process of plasticity and from limits to the range of plasticity. While costs of plasticity are found more often than expected by chance, they are often smaller and less frequent than generally assumed, for reasons we outline here. Finally, this chapter discusses exciting areas for future research in the ecology and evolution of plasticity, including expanding our theoretical understanding with more developmentally realistic models and exploring eco-evolutionary feedbacks.