Evolutionary mechanisms of rapid adaptation to environmental change are poorly understood. I use inbred lines generated from ancestral saline and derived freshwater populations of the copepod Eurytemora affinis to study evolutionary mechanisms of maintenance of genetic variation under varying conditions (Chapter 1), and the extent and nature of regulatory evolution during invasions to freshwater habitats (Chapters 2 and 3). In the first chapter, I provide a rare empirical example of complete beneficial reversal of dominance associated with environmental change and evidence for marginal overdominance in salinity tolerance. These mechanisms might be crucial for maintaining genetic variation in salinity tolerance in E. affinis, allowing rapid adaptation to salinity changes during habitat invasions. In the second chapter, I report striking shifts in gene expression between freshwater and saline lines, out of which relatively small number was due to a plastic response (acclimation), while a majority of gene expression shifts were evolutionary (heritable differences). This indicates that regulatory evolution might play an important role in rapid adaptation during habitat invasions in E. affinis. In the third chapter, I characterize the relative contribution of cis and trans-regulatory evolution associated with freshwater invasions. Majority of gene expression shifts between freshwater and saline lines were due to trans, or combined effects of both cis and trans-regulatory effects, while several important genes, such as Na+/H+ exchanger and acidic chitinase, showed evidence of cis regulatory evolution only. These results contribute significantly to our understanding of regulatory evolution during rapid adaptation in E. affinis.