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We still know very little about how the environment influences coevolutionary dynamics. Here, we investigated both theoretically and empirically how nutrient availability affects the relative extent of escalation of resistance and infectivity (arms race dynamic; ARD) and fluctuating selection (fluctuating selection dynamic; FSD) in experimentally coevolving populations of bacteria and viruses. By comparing interactions between clones of bacteria and viruses both within- and between-time points, we show that increasing nutrient availability resulted in coevolution shifting from FSD, with fluctuations in average infectivity and resistance ranges over time, to ARD. Our model shows that range fluctuations with lower nutrient availability can be explained both by elevated costs of resistance (a direct effect of nutrient availability), and reduced benefits of resistance when population sizes of hosts and parasites are lower (an indirect effect). Nutrient availability can therefore predictably and generally affect qualitative coevolutionary dynamics by both direct and indirect (mediated through ecological feedbacks) effects on costs of resistance. [ABSTRACT FROM AUTHOR]