Phenotypic plasticity is facilitated by epigenetic regulation, and remnants of such regulation may persist after plasticity-inducing cues are gone. However, the relationship between plasticity and transgenerational epigenetic memory is not understood. Dauer diapause in Caenorhabditis elegans provides an opportunity to determine how a plastic response to the early-life environment affects traits later in life and in subsequent generations. We report that, after extended diapause, postdauer worms initially exhibit reduced reproductive success and greater interindividual variation. In contrast, F3 progeny of postdauers display increased starvation resistance and lifespan, revealing potentially adaptive transgenerational effects. Transgenerational effects are dependent on the duration of diapause, indicating an effect of extended starvation. In agreement, RNA-seq demonstrates a transgenerational effect on nutrient-responsive genes. Further, postdauer F3 progeny exhibit reduced gene expression plasticity, suggesting a trade-off between plasticity and epigenetic memory. This work reveals complex effects of nutrient stress over different time scales in an animal that evolved to thrive in feast and famine.