Maternally-derived corticosterone in the egg and corticosterone produced endogenously by altricial nestling birds play essential roles during development. Although persistently high corticosterone levels can be harmful, moderately elevated levels above baseline can lead to reallocation of resources between growth and maintenance to ensure immediate survival or to enhance the development of fitness-related traits. We tested two hypotheses concerning the fitness consequences of elevated corticosterone during pre-natal and post-natal development in altricial house wrens: (1) elevated corticosterone shifts resources away from growth and immune function and (2) elevated corticosterone serves as a signal to allocate resources to fitness-related traits. We also explored the development of the stress response, hypothesizing that early-stage nestlings have little endogenously produced corticosterone, but that their baseline and stress-induced corticosterone levels increase with age. Nestlings hatching from corticosterone-injected eggs were lighter at hatching, but through compensatory growth, ended up heavier than controls near the time of fledgling, an important, fitness-related trait. Nestlings that hatched from corticosterone-injected eggs and those given oral doses of corticosterone did not differ from controls in three other fitness-related traits: immunoresponsiveness, size, or haematocrit. Early- and late-stage nestlings had similar baseline corticosterone levels, and all nestlings increased their plasma corticosterone levels in response to a capture-and-restraint protocol, with older nestlings mounting a stronger stress-induced response than younger nestlings. These results suggest that pre-natal exposure to corticosterone is important in shaping offspring phenotype, and are consistent with the hypothesis that maternally derived corticosterone in the egg can have long-term, fitness-related effects on offspring phenotype.