Phenotypic development is the result of a complex interplay involving the organism's own genetic make-up and the environment it experiences during development. The latter encompasses not just the current environment, but also indirect, and sometimes lagged, components that result from environmental effects on its parents that are transmitted to their developing offspring in various ways and at various stages. These environmental effects can simply constrain development, for example, where poor maternal condition gives rise to poorly provisioned, low-quality offspring. However, it is also possible that environmental circumstances during development shape the offspring phenotype in such a way as to better prepare it for the environmental conditions it is most likely to encounter during its life. Studying the extent to which direct and indirect developmental responses to environmental effects are adaptive requires clear elucidation of hypotheses and careful experimental manipulations. In this paper, I outline how the different paradigms applied in this field relate to each other, the main predictions that they produce and the kinds of experimental data needed to distinguish among competing hypotheses. I focus on birds in particular, but the theories discussed are not taxon specific. Environmental influences on phenotypic development are likely to be mediated, in part at least, by endocrine systems. I examine evidence from mechanistic and functional avian studies and highlight the general areas where we lack key information.