Developing physiological mechanistic models to predict species’ responses to climate-driven environmental variables remains a key endeavor in ecology. Such approaches are challenging, because they require linking physiological processes with fitness and contraction or expansion in species’ distributions. We explore those links for coastal marine species, occurring in regions of freshwater influence (ROFIs) and exposed to changes in temperature and salinity. First, we evaluated the effect of temperature on hemolymph osmolality and on the expression of genes relevant for osmoregulation in larvae of the shore crab Carcinus maenas. We then discuss and develop a hypothetical model linking osmoregulation, fitness, and species expansion/contraction toward or away from ROFIs. In C. maenas, high temperature led to a threefold increase in the capacity to osmoregulate in the first and last larval stages (i.e., those more likely to experience low salinities). This result matched the known pattern of survival for larval stages where the negative effect of low salinity on survival is mitigated at high temperatures (abbreviated as TMLS). Because gene expression levels did not change at low salinity nor at high temperatures, we hypothesize that the increase in osmoregulatory capacity (OC) at high temperature should involve post-translational processes. Further analysis of data suggested that TMLS occurs in C. maenas larvae due to the combination of increased osmoregulation (a physiological mechanism) and a reduced developmental period (a phenological mechanisms) when exposed to high temperatures. Based on information from the literature, we propose a model for C. maenas and other coastal species showing the contribution of osmoregulation and phenological mechanisms toward changes in range distribution under coastal warming. In species where the OC increases with temperature (e.g., C. maenas larvae), osmoregulation should contribute toward expansion if temperature increases; by contrast in those species where osmoregulation is weaker at high temperature, the contribution should be toward range contraction.