Phenotypic plasticity is thought to have a role in driving population establishment, local adaptation and speciation. However, dispersal plasticity has been underappreciated in this literature. Plasticity in the decision to disperse is taxonomically widespread and I provide examples for insects, molluscs, polychaetes, vertebrates and flowering plants. Theoretical work is limited but indicates an interaction between dispersal distance and plasticity in the decision to disperse. When dispersal is confined to adjacent patches, dispersal plasticity may enhance local adaptation over unconditional (non-plastic) dispersal. However, when dispersal distances are greater, plasticity in dispersal decisions strongly reduces the potential for local adaptation and population divergence. Upon dispersal, settlement may be random, biased but genetically determined, or biased but plastically determined. Theory shows that biased settlement of either type increases population divergence over random settlement. One model suggests that plasticity further enhances chances of speciation. However, there are many strategies for deciding on where to settle such as a best-of-N strategy, sequential sampling with a threshold for acceptance or matching with natal habitat. To date, these strategies do not seem to have been compared within a single model. Although we are just beginning to explore evolutionary effects of dispersal plasticity, it clearly has the potential to enhance as well as inhibit population divergence. Additional work should pay particular attention to dispersal distance and the strategy used to decide on where to settle.