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Some insect species have been proposed as a sustainable alternative to traditional animal‐based food and feed sources. Optimisation of insect production can generally be achieved using two main approaches: optimising environmental conditions and improving traits of interest through selective breeding. These avenues are not inseparable as performance of a genotype might differ between environments due to phenotypic plasticity and because genotypes can respond differently to environmental changes, that is genotype‐by‐environment interactions (G × E). In insect production, diets can be of variable quality and consist of waste‐ and by‐products of low nutritional value, which might result in decreased performance and/or increased trait variability within a population. Therefore, it is of interest to investigate how genotypes perform across various diets. Here, we investigated plasticity and G × E for mean performance and trait variation, which we define as the ability of a genotype to produce consistent phenotypes within and across environments. We did this by rearing 190 full‐sib families of house fly larvae, Musca domestica L. (Diptera: Muscidae), on two diets based on either alfalfa, Medicago sativa L. (Fabales: Fabaceae), or deproteinated grass. Four larval traits were assessed: egg‐to‐larva viability, surface area, dry weight and relative lipid content. Reaction norms were used to investigate the effects of diet on full‐sib family mean and trait variation within and across environments. We found that families reared on the grass‐based diet had higher performance across all investigated traits than families reared on the alfalfa‐based diet. For both mean performance and trait variation, we found G × E for all investigated traits. These findings suggest that there is genetic variation for plasticity (slope of reaction norms) for both trait mean and trait variation, and thus that there is a potential to breed for genotypes with high performance as well as for genotypes with low trait variation within and across diets. [ABSTRACT FROM AUTHOR]