Rising temperatures associated with global warming present a challenge to the fate of many aquatic organisms. Although rapid evolutionary response to temperature-mediated selection may allow local persistence of populations under global warming, and therefore is a key aspect of evolutionary biology, solid proof of its occurrence is rare. In this study, we tested for genetic adaptation to an increase in temperature in the water flea Daphnia magna, a keystone species in freshwater systems, by performing a thermal selection experiment under laboratory conditions followed by the quantification of microevolutionary responses to temperature for both life-history traits as well as for intraspecific competitive strength. After three months of selection, we found a microevolutionary response to temperature in performance, but only in one of two culling regimes, highlighting the importance of population dynamics in driving microevolutionary change within populations. Furthermore, there was an evolutionary increase in thermal plasticity in performance. The results of the competition experiment were in agreement with predictions based on performance as quantified in the life table experiment and illustrate that microevolution within a short time frame has the ability to influence the outcome of intraspecific competition.