Noisy bistable dynamics in gene regulation can underlie stochastic switching and is demonstrated to be beneficial under fluctuating environments. It is not known, however, if fluctuating selection alone can result in bistable dynamics. Using a stochastic model of simple feedback networks, we apply fluctuating selection on gene expression and run in silico evolutionary simulations. We find that independent of the specific nature of the environment-fitness relationship, the main outcome of fluctuating selection is the evolution of increased evolvability in the network; system parameters evolve toward a nonlinear regime where phenotypic diversity is increased and small changes in genotype cause large changes in expression level. In the presence of noise, the evolution of increased nonlinearity results in the emergence and maintenance of bistability. Our results provide the first direct evidence that bistability and stochastic switching in a gene regulatory network can emerge as a mechanism to cope with fluctuating environments. They strongly suggest that such emergence occurs as a byproduct of evolution of evolvability and exploitation of noise by evolution.