Global warming is causing plastic and evolutionary changes in the phenotypes of ectotherms. Yet, we have limited knowledge on how the interplay between plasticity and evolution shapes thermal responses and underlying gene expression patterns. We assessed thermal reaction norm patterns across the transcriptome and identified associated molecular pathways in northern and southern populations of the damselfly Ischnura elegans. Larvae were reared in a common garden experiment at the mean summer water temperatures experienced at the northern (20 °C) and southern (24 °C) latitudes. This allowed a space-for-time substitution where the current gene expression levels at 24 °C in southern larvae are a proxy for the expected responses of northern larvae under gradual thermal evolution to the predicted 4 °C warming. Most differentially expressed genes showed fixed differences across temperatures between latitudes, suggesting that thermal genetic adaptation will mainly evolve through changes in constitutive gene expression. Northern populations also frequently showed plastic responses in gene expression to mild warming, while southern populations were much less responsive to temperature. Thermal responsive genes in northern populations showed to a large extent a pattern of genetic compensation, i.e. gene expression that was induced at 24 °C in northern populations remained at a lower constant level in southern populations, and were associated with metabolic and translation pathways. There was instead little evidence for genetic assimilation of an initial plastic response to mild warming. Our data therefore suggest that genetic compensation rather than genetic assimilation may drive the evolution of plasticity in response to mild warming in this damselfly species. Overall design: RNA was extracted from six larvae per combination of temperature and population. The RNA of three larvae per combination of temperature and population was pooled. This resulted in a total of 24 pooled RNA samples (2 rearing temperatures x 2 latitudes x 3 populations x 2 replicates).