A major challenge of modern Biology is elucidating the functional consequences of natural mutations. Although we have a good understanding of the effects of laboratory-induced mutations on the molecular- and organismal-level phenotypes, the study of natural mutations has lagged behind. In this work, we explore the phenotypic space and the evolutionary history of a previously identified adaptive transposable element insertion. We first combined several tests that capture different signatures of selection to show that there is evidence of positive selection in the regions flanking FBti0019386 insertion. We then explored several phenotypes related to known phenotypic effects of nearby genes, and having plausible connections to fitness variation in nature. We found that flies with FBti0019386 insertion had a shorter developmental time and were more sensitive to stress, which are likely to be the adaptive effect and the cost of selection of this mutation, respectively. Interestingly, these phenotypic effects are not consistent with a role of FBti0019386 in temperate adaptation as has been previously suggested. Indeed, a global analysis of the population frequency of FBti0019386 showed that climatic variables explain well the FBti0019386 frequency patterns only in Australia. Finally, although FBti0019386 insertion could be inducing the formation of heterochromatin by recruiting HP1a (Heterochromatin Protein 1a) protein, the insertion is associated with upregulation of sra in adult females. Overall, our integrative approach allowed us to shed light on the evolutionary history, the relevant fitness effects, and the likely molecular mechanisms of an adaptive mutation and highlights the complexity of natural genetic variants.