Negative density dependence of clutch size is a ubiquitous characteristic of avian populations and is partly due to within-individual phenotypic plasticity. Yet, very little is known about the extent to which individuals differ in their degree of phenotypic plasticity, whether such variation has a genetic basis and whether level of plasticity can thus evolve in response to selection. Using 18 years of data of a Dutch great tit population (Parus major), we show that females reduced clutch size with increasing population density (slopes of the reaction norms), differed strongly in their average clutch size (elevations of the reaction norms) at the population-mean density and that the latter variation was partly heritable. In contrast, we could not detect individual variation in phenotypic plasticity (‘I × E’). Level of plasticity is thus not likely to evolve in response to selection in this population. Observed clutch sizes deviated more from the estimated individual reaction norms in certain years and densities, implying that the within-individual between-year variance (so-called residual variance) of clutch size was heterogeneous with respect to these factors. Given the observational nature of this study, experimental manipulation of density is now warranted to confirm the causality of the observed density effects. Our analyses demonstrate that failure to acknowledge this heterogeneity would have inflated the estimate of ‘I × E’ and led to misinterpretation of the data. This paper thereby emphasizes the fact that heterogeneity in residuals can provide biologically insightful information about the ecological processes underlying the data.