Use of pesticides can have substantial nonlethal impacts on nontarget species, including driving evolutionary change, often with unknown consequences for species, ecosystems, and society. Hyalella azteca, a species complex of North American freshwater amphipods, is widely used for toxicity testing of water and sediment and has frequently shown toxicity due to pyrethroid pesticides. We demonstrate that 10 populations, 3 from laboratory cultures and 7 from California water bodies, differed by at least 550-fold in sensitivity to pyrethroids. The populations sorted into four phylogenetic groups consistent with species-level divergence. By sequencing the primary pyrethroid target site, the voltage-gated sodium channel, we show that point mutations and their spread in natural populations were responsible for differences in pyrethroid sensitivity. At least one population had both mutant and WT alleles, suggesting ongoing evolution of resistance. Although nonresistant H. azteca were susceptible to the typical neurotoxic effects of pyrethroids, gene expression analysis suggests the mode of action in resistant H. azteca was not neurotoxicity but was oxidative stress sustained only at considerably higher pyrethroid concentrations. The finding that a nontarget aquatic species has acquired resistance to pesticides used only on terrestrial pests is troubling evidence of the impact of chronic pesticide transport from land-based applications into aquatic systems. Our findings have far-reaching implications for continued uncritical use of H. azteca as a principal species for monitoring and environmental policy decisions.