Local adaptation is ubiquitous, but the molecular mechanisms that give rise to this ecological phenomenon remain largely unknown. A year-long reciprocal transplant of mustard hill coral (Porites astreoides) between a highly environmentally variable inshore habitat and a more stable offshore habitat demonstrated that populations exhibit phenotypic signatures that are consistent with local adaptation. We characterized the genomic basis of this adaptation in both coral hosts and their intracellular symbionts (Symbiodinium sp.) using genome-wide gene expression profiling. Populations differed primarily in their capacity for plasticity: following transplantation to a novel environment, inshore-origin coral expression profiles became significantly more similar to the local population's profiles than those in offshore-origin corals. Furthermore, elevated plasticity of the environmental stress response expression was correlated with lower susceptibility to a natural summer bleaching event, suggesting that plasticity is adaptive in the inshore environment. Our results reveal a novel genomic mechanism of resilience to a variable environment, demonstrating that corals are capable of a more diverse molecular response to stress than previously thought.