Variation in stress responses has been investigated in relation to environmental factors, species ecology, life history and fitness. Moreover, mechanistic studies have unravelled molecular mechanisms of how acute and chronic stress responses cause physiological impacts (‘damage’), and how this damage can be repaired. However, it is not yet understood how the fitness effects of damage and repair influence stress response evolution. Here we study the evolution of hormone levels as a function of stressor occurrence, damage and the efficiency of repair. We hypothesise that the evolution of stress responses depends on the fitness consequences of damage and the ability to repair that damage. To obtain some general insights, we model a simplified scenario in which an organism repeatedly encounters a stressor with a certain frequency and predictability (temporal autocorrelation). The organism can defend itself by mounting a stress response (elevated hormone level), but this causes damage that takes time to repair. We identify optimal strategies in this scenario and then investigate how those strategies respond to acute and chronic exposures to the stressor. We find that for higher repair rates, baseline and peak hormone levels are higher. This typically means that the organism experiences higher levels of damage, which it can afford because that damage is repaired more quickly, but for very high repair rates the damage does not build up. With increasing predictability of the stressor, stress responses are sustained for longer, because the animal expects the stressor to persist, and thus damage builds up. This can result in very high (and potentially fatal) levels of damage when organisms are exposed to chronic stressors to which they are not evolutionarily adapted. Overall, our results highlight that at least three factors need to be considered jointly to advance our understanding of how stress physiology has evolved: (i) temporal dynamics of stressor occurrence; (ii) relative mortality risk imposed by the stressor itself versus damage caused by the stress response; and (iii) the efficiency of repair mechanisms.