Climate change is expected to shift species distributions as populations grow in favourable habitats and decline in harsh ones. Montane animals escape warming conditions at low elevation by moving upslope, but may be physiologically constrained by conditions there. Effects of elevation were studied for montane populations of the leaf beetle Chrysomela aeneicollis, where allele frequencies at nuclear genes and the mitochondrion vary along latitudinal and altitudinal gradients. A population presence survey conducted along a steep altitudinal transect (1,600–3,800 m) from 1981 to 2018 revealed that populations expand to low elevation following wet winters and retreat during drought. Quantitative surveys of a 45‐site population network conducted from 2012 to 2018 along multiple altitudinal transects show that when beetles are abundant, population size peaks at 3,135 m, highest altitude populations are at the southern edge of the range, and populations decline and extirpate during drought, especially at low elevation. To examine effects of elevation on measures of performance and fitness, beetles from a genetically introgressed population (Bishop Creek) were examined. In nature, fecundity of females transplanted along natural altitudinal transects was measured, as was thorax cytochrome c oxidase (CytOx) activity. To examine effects of environmental hypoxia independent of other factors limiting persistence at high elevation, development rate and activity of malate dehydrogenase (MDH) were measured for larvae reared under otherwise common garden conditions at low (1,250 m) and high (3,800 m) elevation. In nature, fecundity declined with increasing elevation, independent of air temperature. CytOx activity was higher at high than low elevation, especially for individuals possessing genotypes of southern origin. Laboratory‐reared larvae with southern mitochondrial haplotypes developed equally well at both elevations, but larvae with northern haplotypes developed more slowly at high elevation. MDH activity showed a similar pattern, suggesting that slower development rates at high elevation may be due to reduction in metabolic rate. These findings suggest that physiological effects of environmental hypoxia may contribute to other factors known to restrict insects’ ability to persist at high elevation, ultimately disrupting associated ecological communities. However, some populations may possess genetic variation that allows for local adaption to high elevation. A plain language summary is available for this article.