Climatic variations are known to engender life-history diversification of species and populations at large spatial scales. However, the extent to which microgeographic variations in climate (e.g., those occurring within a single large ecosystem) can also drive life-history divergence is generally poorly documented. We exploited a spatial gradient in water temperatures at three sites across a large montane lake in southwest China (Lake Erhai) to examine the extent to which life histories of a short-lived fish species (icefish, Neosalanx taihuensis) diversified in response to thermal regime following introduction 25 y prior. In general, warmwater icefish variants grew faster, had larger adult body size and higher condition and fecundity, but matured at smaller sizes. Conversely, coldwater variants had smaller adult body size and lower condition, but matured at larger sizes and had larger eggs. These life-history differences strongly suggest that key ecological trade-offs exist for icefish populations exposed to different thermal regimes, and these trade-offs have driven relatively rapid diversification in the life histories of icefish within Lake Erhai. Results are surprisingly concordant with current knowledge on life-history evolution at macroecological scales, and suggest that improved conservation management might be possible by focusing on patterns operating at microgeographical, including, within-ecosystem scales.