A central challenge in evolutionary biology is to uncover mechanisms maintaining functional genetic variation in heterogeneous environments 1,2 . Population genetics theory suggests that beneficial reversal of dominance, where alleles are dominant when beneficial and recessive when deleterious, can help maintain such variation in temporally varying environments 3,4 . However, empirical examples are scarce 5 due to difficulties in measuring dominance in fitness in field experiments 6 . Here we quantify the selective effects and dominance of large-effect insecticide-resistant alleles at the Ace enzymatic locus in Drosophila melanogaster 7 . In laboratory assays, we identify a beneficial reversal of dominance of the Ace alleles for fitness-associated phenotypes under selection in the presence and absence of malathion, a widely used organophosphate insecticide. Using highly replicated field mesocosms, we show that resistant Ace alleles fluctuate rapidly in response to a pulse of malathion, but are maintained in its absence. We show that this pattern is only consistent with beneficial reversal of dominance, where the resistant Ace alleles are dominant and beneficial for resistance and recessive and deleterious for enzymatic function. Moreover, we find that seasonally fluctuating selection due to insecticide resistance can generate fluctuating chromosome-scale genomic perturbations of allele frequencies. We propose an extension to Wright's physiological theory of dominance 8 , arguing that under fluctuating selection the currently deleterious allele should often behave as loss-of-function and thus recessive to the currently beneficial allele. Overall, our results suggest that beneficial reversals of dominance can be common and can help both maintain genetic variation and allow for rapid evolutionary responses to environmental shifts.