Facultative paedomorphosis in salamanders occurs when larvae respond to varying environmental conditions by either metamorphosing into terrestrial metamorphic adults or retaining their larval morphology to become sexually mature paedomorphic adults. Several hypotheses have been proposed for the evolutionary maintenance of this environmentally induced dimorphism, but few data are available to assess them adequately. We studied a montane population of the tiger salamander,Ambystoma tigrinum nebulosum, and measured the adult growth rate and body condition across three growing seasons to assess the relative costs and benefits of each morph. Metamorphic adults grew more than paedomorphic adults in terms of snout—vent length across years and in weight within years. Dietary analyses and foraging experiments revealed some of the proximate factors that may underlie these differential growth patterns. Across all prey, metamorphs had significantly higher biomass and calories per stomach sample than paedomorphs. Metamorphic diets primarily consisted of the fairy shrimpBranchinecta coloradensis, whereas paedomorphic diets contained a variety of benthic and terrestrial invertebrates. Foraging experiments revealed that both morphs are more successful at capturing fairy shrimp relative to other prey types and both show high electivity toward this prey. However, fairy shrimp occurred only in non-permanent ponds and thus are inaccessible to paedomorphs, which can survive only in permanent ponds. Paedomorphs also experience higher levels of intraspecific competition with large larvae in permanent ponds than metamorphs do in non-permanent ponds. Thus, metamorphs obtain a growth advantage over paedomorphs by foraging in non-permanent ponds that contain fairy shrimp and have reduced intraspecific competition. These results suggest that paedomorphs should have decreased fitness relative to metamorphs, primarily because metamorphs can move into the best habitats for growth. The net fitness effect of morph-specific differences in dispersal depend on whether there are trade-offs with other life history traits. Nonetheless, because the relative benefit of metamorph dispersal will change with environmental conditions in permanent ponds and the surrounding habitat, the relative fitness payoff to each morph should track changes in the environment. Thus, facultative paedomorphosis may be maintained in part by variable, environmentally-specific fitness payoffs to each morph.