Since September 1987, seafloor instrumentation monitoring ground deformation has been maintained on the summit of Axial Volcano on the central Juan de Fuca Ridge. During a January 1998 volcanic episode, pressure records from the central caldera showed a significant increase in pressure, indicating caldera subsidence of over 3 m. This observed subsidence is interpreted to represent volcanic deflation as magma is erupted and/or injected into the volcanic flanks. Temperature anomalies of nearly 0.45 ¿C were also observed. A comparison of the subsidence record with hydroacoustic recordings indicates a continuous volcanic tremor signal coincident with the subsidence event. The time-coincidence of subsidence of the summit caldera with migration of epicenters into the volcanic rift zones confirms that during the 1998 episode, the volcanic flanks were supplied by lateral dike injection from a central magma body, rather than locally derived magma sources.