Embryos of the annual killifish Austrofundulus limnaeus enter a state of developmental arrest termed diapause as part of their normal developmental program. Diapause can occur at two distinct developmental stages in this species, termed diapause II and III. When incubated at 25°C, most embryos enter diapause II, whereas a small percentage of 'escape' embryos develop continuously past diapause II and enter diapause III. Control of entry into diapause II can be altered by maternal influences and the incubation environment experienced by the embryos. Young females produce a higher proportion of escape embryos than do older females. In addition, increasing the incubation temperature from 25 to 30°C induces all embryos to escape from diapause. Surprisingly, escape embryos follow a different morphological and physiological developmental trajectory than do embryos that enter diapause II. Development of anterior structures is advanced compared with that of posterior structures in escape embryos when compared with embryos that will enter diapause II. The difference in timing of development for these two trajectories is consistent with changes observed between two species but is very atypical of variation observed within a species. Importantly, the two developmental pathways diverge early in development, during the segmentation period, when, according to evolutionary theory, constraint on developmental pathways should be relatively high. The possession of alternative developmental pathways in a vertebrate embryo is a novel finding, the ecological and evolutionary importance of which is still unknown, but potentially significant in terms of life-history evolution.