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Broad geographical distributions that include marked climatic variation may expose populations to distinct selective pressures. Local adaptation to differences in developmental conditions may lead to divergence in embryonic and hatchling traits for populations of oviparous reptiles. Among‐population differences in hatchling size and the duration of development are often observed in lizards with wide and climatically diverse distributions. Variation in hatchling phenotypes can arise from variation in maternal allocation, developmental plasticity or selection acting on embryonic traits. We studied variation in hatchlings of the Australian water dragon (Intellagama lesueurii), comparing traits related to growth and patterns of developmental plasticity. We recorded marked differences in hatchling sizes among populations from different climate types, which did not result from differences in maternal investment or from a plastic response to incubation temperatures. Embryos from southern, temperate populations exhibited shorter incubation times when incubated at cold temperatures but utilized less yolk during development and hatched smaller, with more residual yolk, regardless of incubation treatment. We suggest that these findings represent the first example of among‐population variation in patterns of embryonic resource allocation and a novel mechanism mediating offspring size in reptiles. We further suggest that variation in embryonic resource allocation in I. lesueurii, together with evolutionary changes in reaction norms for developmental rate, evolved as adaptations to seasonal length and conditions associated with a tropical‐temperate gradient. [ABSTRACT FROM AUTHOR]