Acclimation increases tolerance to stress in individuals but is assumed to contribute fitness costs when the stressor is absent, though data supporting this widely held claim are sparse. Therefore, using clonal (i.e., genetically identical) cultures of Daphnia pulex, we isolated the contributions of acclimation to the regulation of the metal response gene, metallothionein 1 (MT1), and defined the reproductive benefits and costs of cadmium (Cd)-acclimation. Daphnia pulex were exposed for 50 parthenogenetic generations to environmentally realistic levels (1 μg Cd/L), and tolerance to Cd and other metals assessed during this period via standard toxicity tests. These tests revealed (1) increased tolerance to Cd compared to genetically identical nonacclimated cultures, (2) fitness costs in Cd-acclimated Daphnia when Cd was removed, and (3) cross-tolerance of Cd-acclimated Daphnia to zinc and silver, but not arsenic, thereby defining a functional role for metallothionein. Indeed, Cd-acclimated clones had significantly higher expression of MT1 mRNA than nonacclimated clones, when Cd exposed. Both the enhanced induction of MT1 and tolerant phenotype were rapidly lost when Cd was removed (1-2 generations), which is further evidence of acclimation costs. These findings provide evidence for the widely held view that acclimation is costly and are important for investigating evolutionary principles of genetic assimilation and the survival mechanisms of natural populations that face changing environments.