Extreme weather events such as heat waves are becoming more frequent and intense. Populations can cope with elevated heat stress by evolving higher basal heat tolerance (evolutionary response) and/ or stronger induced heat tolerance (plastic response). However, there is ongoing debate about whether basal and induced heat tolerance are negatively correlated and whether adaptive potential in heat tolerance is sufficient under ongoing climate warming. To evaluate the evolutionary potential of basal and induced heat tolerance, we performed experimental evolution on a temperate source population of the dung fly Sepsis punctum. Offspring of flies adapted to three thermal selection regimes (Hot, Cold and Reference) were subjected to acute heat stress after having been exposed to either a hot- or non-acclimation pre-treatment. As different traits may respond differently to temperature stress, several physiological and life history traits were assessed. Condition-dependence of the response was evaluated by exposing juveniles to different levels of developmental (food restriction/ rearing density) stress. Heat knockdown times were highest while acclimation effects were lowest in the Hot selection regime, indicating a negative association between basal and induced heat tolerance. However, survival, adult longevity, fecundity and fertility did not show such a pattern. Acclimation had positive effects in heat-shocked flies, but in the absence of heat stress hot-acclimated flies had reduced lifespans relative to non-acclimated ones, thereby revealing a potential cost of acclimation. Moreover, body size positively affected heat tolerance and unstressed individuals were less prone to heat stress than stressed flies, offering support for energetic costs associated with heat tolerance. Overall, our results indicate that heat tolerance of temperate insects can evolve under rising temperatures, but this response could be limited by a negative relationship between basal and induced thermotolerance, and may involve some but not other fitness-related traits.