Local adaptation is a key driver of ecological specialization and the formation of new species. Despite its importance, the evolution of gene regulatory divergence among locally-adapted populations is poorly understood, especially how that divergence manifests in nature. Here, we evaluate gene expression divergence and allele-specific gene expression responses for locally-adapted coastal perennial and inland annual accessions of the yellow monkeyflower, Mimulus guttatus, in a field reciprocal transplant experiment. Overall, 6765 (73%) of surveyed genes were differentially expressed between coastal and inland habitats, while 7213 (77%) were differentially expressed between the coastal perennial and inland annual accessions. Cis-regulatory variation was pervasive, affecting 79% (5532) of differentially expressed genes. We detected trans effects for 52% (3611) of differentially expressed genes. Expression plasticity of alleles across habitats (GxE interactions) appears to be relatively common (affecting 18% of transcripts) and could minimize fitness trade-offs at loci that contribute to local adaptation. We also found evidence that at least one chromosomal inversion may act as supergene by holding together haplotypes of differentially expressed genes, but this pattern depends on habitat context. Our results highlight multiple key patterns regarding the relationship between gene expression and the evolution of locally adapted populations.