The influence of grain size and water content on the high-temperature plasticity of olivine aggregates was studied, using a gas-medium high-pressure deformation apparatus. The specimens used were hot-pressed, dense olivine aggregates with controlled grain size ranging from a few to 70 μm, with or without added water. Mechanical tests were made at 1573 K and 300 MPa confining pressure and at strain rates of 10-3 to 10-6s-1. The results reveal two distinct mechanisms of deformation, depending on stress level and grain size. At relatively high stress and large grain size, the strain rate is proportional to about the cube power of the stress and is nearly independent of grain size. In this regime, microstructural observations gave evidence of intragranular deformation involving dislocation motion. At low stress and small grain size, the strain rate depends almost linearly on stress and decreases markedly with increase in grain size. In the latter regime, little evidence was found for intragranular deformation. These observations suggest that the deformation mechanism in the grain size insensitive regime is dislocation creep, while that in the grain size sensitive regime is diffusion creep. In both regimes, water was found to enhance the creep rate. The absence of grain size sensitivity in the dislocation creep regime and comparison with single-crystal data indicate that the water weakening effect is mainly an intragranular process. However, the existence also of a water weakening effect in the diffusion creep regime indicates that water also enhances diffusion. The extrapolation of the present results to coarser grain sizes indicates that the transition from dislocation to diffusion creep occurs at 0.1--1 MPa for 10-mm grain size. Therefore it is suggested that this transition may occur in the upper mantle and that, in both regimes, the presence of trace amounts of water will result in significantly lower creep strength than under strictly ''dry'' conditions.