Comparative genomic studies have reported widespread variation in levels of gene expression within and between species. Using these data to infer organism-level trait divergence has proven to be a key challenge in the field. We have used a wild Malaysian population of S. cerevisiae as a test bed in the search to predict and validate trait differences based on observations of regulatory variation. Malaysian yeast, when cultured in standard medium, activated regulatory programs that protect cells from the toxic effects of high iron. Malaysian yeast also showed a hyperactive regulatory response during culture in the presence of excess iron and had a unique growth defect in conditions of high iron. Molecular validation experiments pinpointed the iron metabolism factors AFT1, CCC1, and YAP5 as contributors to these molecular and cellular phenotypes; in genome-scale sequence analyses, a suite of iron toxicity response genes showed evidence for rapid protein evolution in Malaysian yeast. Our findings support a model in which iron metabolism has diverged in Malaysian yeast as a consequence of a change in selective pressure, with Malaysian alleles shifting the dynamic range of iron response to low-iron concentrations and weakening resistance to extreme iron toxicity. By dissecting the iron scarcity specialist behavior of Malaysian yeast, our work highlights the power of expression divergence as a signpost for biologically and evolutionarily relevant variation at the organismal level. Interpreting the phenotypic relevance of gene expression variation is one of the primary challenges of modern genomics.