Critical size at which metamorphosis is initiated represents an important checkpoint in insect development. Here, we use experimental evolution in Drosophila melanogaster to test the long-standing hypothesis that larval malnutrition should favour a smaller critical size. We report that six fly populations subject to 112 generations of laboratory natural selection on an extremely poor larval food evolved an 18% smaller critical size (compared to six unselected control populations). Thus, even though critical size is not plastic with respect to nutrition, smaller critical size can evolve as an adaptation to nutritional stress. We also demonstrate that this reduction in critical size (rather than differences in growth rate) mediates a trade-off in body weight that the selected populations experience on standard food, on which they show a 15-17% smaller adult body weight. This illustrates how developmental mechanisms that control life history may shape constraints and trade-offs in life history evolution.