Widespread species often show geographic variation in thermally-sensitive traits, providing insight into how species respond to shifts in temperature through time. Such patterns may arise from phenotypic plasticity, genetic adaptation, or their interaction. In some cases, the effects of genotype and temperature may act together to reduce, or to exacerbate, phenotypic variation in fitness-related traits across varying thermal environments. We find evidence for such interactions in life-history traits of Heteronympha merope, a butterfly distributed across a broad latitudinal gradient in south-eastern Australia. We show that body size in this butterfly is negatively related to developmental temperature in the laboratory, in accordance with the temperature-size rule, but not in the field, despite very strong temperature gradients. A common garden experiment on larval thermal responses, spanning the environmental extremes of H. merope's distribution, revealed that butterflies from low latitude (warmer climate) populations have relatively fast intrinsic growth and development rates compared to those from cooler climates. These synergistic effects of genotype and temperature across the landscape (co-gradient variation) are likely to accentuate phenotypic variation in these traits, and this interaction must be accounted for when predicting how H. merope will respond to temperature change through time. These results highlight the importance of understanding how variation in life-history traits may arise in response to environmental change. Without this knowledge, we may fail to detect whether organisms are tracking environmental change, and if they are, whether it is by plasticity, adaptation or both.