Gene regulatory divergence is thought to play an important role in adaptation, yet its extent and underlying mechanisms remain largely elusive under scenarios of local adaptation with gene flow. Local adaptation is widespread in marine species despite generally high connectivity and often associated with tightly-linked genomic architectures, such as chromosomal inversions. To investigate gene regulatory evolution under gene flow and the role of discrete genomic regions associated with local adaptation to a steep thermal gradient, we generated RNA-seq data from Atlantic silversides (Menidia menidia) from two locally adapted populations and their F1 hybrids, reared under two different temperatures. We found substantial divergence in gene expression and thermal plasticity, with up to 31% of genes being differentially expressed, and primarily trans-rather than cis-regulatory divergence between populations, despite ongoing gene flow. Substantially reduced thermal plasticity, temperature-dependent gene misexpression and the disruption of co-expression networks in hybrids point toward a role of regulatory incompatibilities in maintaining local adaptation, particularly under colder temperatures, which appear more challenging for this species. Adaptive chromosomal inversions seem to play an important role in gene regulatory divergence through the accumulation of regulatory incompatibilities but are not consistently enriched for divergently regulated genes. Together, these results highlight that gene regulation can diverge substantially among populations connected by strong gene flow in marine environments, partly due to the accumulation of temperature-dependent regulatory incompatibilities within inversions.