Costelow was selected for the opening 27-26 home loss to Scotland but had a poor game as Wales went 27-0 down before rallying in the second half once Costelow had left the pitch with a neck injury.
He subsequently missed the 16-14 defeat by England at Twickenham in their second game when 22-year-old Ioan Lloyd showed composure in the number 10 jersey.
Despite this, Gatland has turned back to Costelow for the daunting trip to Ireland.
"It was a tough call," he told reporters on Thursday. "We were pretty happy with Ioan’s development at 10. Things didn’t go as well for Sam in the first half against Scotland. He’s someone we’ve been working closely with.
"At the World Cup (in France), it was easy for him (Costelow), having some experienced 10s in front of him. I think it dawned on him before Scotland that he’s Wales’ number 10. He was pretty nervous for that one."
Gatland said there was no panic in the team after two defeats and that he would continue to put his faith in young players with the 2027 World Cup in mind.
"It’s how you look at it. We’ve had two defeats but we could have had two close wins as well. That’s where we are as a team. We’re aware we’ve got a huge amount of growth in us," he said.
"We’ve made that decision (to stick with young players) because we feel there’s a chance to develop this team over the next few years.
"I’ve had this chat with (England coach) Steve Borthwick and he’s in the same position. Hopefully, people can see what we’re trying to do."
Gatland admits Ireland present a huge challenge but an exciting one for his players.
"They are a settled team, they are world-class and it’s a big challenge for us. We're excited for it," he said. "They are comfortable when they have got the ball and they have got the ability to keep it for multiple phases.
"That really stresses you. That is when they are incredibly dangerous. They have got some key individuals and we have got to unsettle them."
Ciaran Frawley will get a first start for Ireland after being selected at full-back to face Wales, with coach Andy Farrell naming a strong team for the Dublin clash.
Peter O’Mahony returns to captain the side with Bundee Aki, Tadhg Beirne, Tadhg Furlong, Jamison Gibson-Park and Josh van der Flier also recalled to the starting lineup.
They had rested several key players for their last game against Italy, which they won 36-0 in Dublin to make it two wins from two games in this year’s championship.
Australia-born Frawley, 26, replaces Hugo Keenan, who has hurt his knee. Frawley made his two previous appearances for Ireland off the bench.
O’Mahony was injured for the last match but takes over the captaincy from Caelan Doris, who remains in the loose forward trio despite injury concerns earlier this week.
Farrell chose a 6-2 split of forwards against backs on the bench as he did for the Six Nations opener when they sent out an emphatic warning of their potential to keep their crown by whipping France 38-17 in Marseille at the start of the month.
The bench split allows Ireland to keep James Ryan, Ryan Baird and Jack Conan in the matchday squad, having all impressed as starters against Italy.
Munster tight-head Oli Jager gets a first call-up among the substitutes and is in line to win his first Ireland cap.
