A major unresolved question is how bacteria living in complex communities respond to environmental changes. In communities, biotic interactions may either facilitate or constrain evolution depending on whether the interactions expand or contract the range of ecological opportunities. A fundamental challenge is to understand how the surrounding biotic community modifies evolutionary trajectories as species adapt to novel environmental conditions. Here we show that community context can dramatically alter evolutionary dynamics using a novel approach that ‘cages’ individual focal strains within complex communities. We find that evolution of focal bacterial strains depends on properties both of the focal strain and of the surrounding community. In particular, there is a stronger evolutionary response in low-diversity communities, and when the focal species have a larger genome and are initially poorly adapted. We see how community context affects resource usage and detect genetic changes involved in carbon metabolism and inter-specific interaction. The findings demonstrate that adaptation to new environmental conditions should be investigated in the context of interspecific interactions.