Mutations often have consequences that vary across individuals. Here, we show that the stimulation of a stress response can reduce mutation penetrance in Caenorhabditis elegans. Moreover, this induced mutation buffering varies across isogenic individuals because of interindividual differences in stress signaling. This variation has important consequences in wild-type animals, producing some individuals with higher stress resistance but lower reproductive fitness and other individuals with lower stress resistance and higher reproductive fitness. This may be beneficial in an unpredictable environment, acting as a "bet-hedging" strategy to diversify risk. These results illustrate how transient environmental stimuli can induce protection against mutations, how environmental responses can underlie variable mutation buffering, and how a fitness trade-off may make variation in stress signaling advantageous.