Rapid phenotypic changes in traits of adaptive significance are crucial for organisms to thrive in changing environments. How such phenotypic variation is achieved rapidly, despite limited genetic variation in species that experience a genetic bottleneck is unknown. Capsella rubella, an annual and inbreeding forb (Brassicaceae), is a great system for studying this basic question. Its distribution is wider than those of its congeneric species, despite an extreme genetic bottleneck event that severely diminished its genetic variation. Here, we demonstrate that transposable elements (TEs) are an important source of genetic variation that could account for its high phenotypic diversity. TEs are (i) highly enriched in C. rubella compared with its outcrossing sister species Capsella grandiflora, and (ii) 4.2% of polymorphic TEs in C. rubella are associated with variation in the expression levels of their adjacent genes. Furthermore, we show that frequent TE insertions at FLOWERING LOCUS C (FLC) in natural populations of C. rubella could explain 12.5% of the natural variation in flowering time, a key life history trait correlated with fitness and adaptation. In particular, we show that a recent TE insertion at the 3′ UTR of FLC affects mRNA stability, which results in reducing its steady-state expression levels, to promote the onset of flowering. Our results highlight that TE insertions can drive rapid phenotypic variation, which could potentially help with adaptation to changing environments in a species with limited standing genetic variation.