Four ultramafic xenoliths recovered from Hawaiian basalts contain CO2-fluid inclusion arrays which originated as healed microcracks. These healed microcracks have been used to study the microcracking mechanisms in the xenolith source region. Fluid inclusion arrays in olivine have a preferred crystallographic orientation which is consistent with a hypothesis of microcrack nucleation upon dislocation pileups by the Stroh mechanism on the following olivine slip systems: (0kl)<100>, (110)<001>, and (010)<001>. Previous investigators have shown that all these slip systems of olivine are active at high stress or low temperature. Olivine neoblasts occur as small grains in local shear zones (0.04 mm diameter and less than 3% of total volume) and larger grains which embay porphyroclasts throughout the specimens (0.22-mm diameter and approximately 30% percent of total volume). Olivine neoblast diameters provides estimates of the deviatoric stress of 160--200 MPa using the smaller grains and 50--75 MPa using the larger grains. The absence of clinopyroxene mechanical twinning in the xenoliths provides an independent paleopiezometer that limits the maximum deviatoric stress in the peridotite source region to 200 MPa. Fluid inclusion arrays are parallel to each other, are perpendicular to penetrative foliation planes produced by intragranular plasticity, and have an average spacing between arrays of 0.5--2.0 mm. Recrystallized olivine grains (neoblasts) are free of fluid inclusions. Estimates of the contribution of Stroh cracks to the deformation of the xenolith source region indicate a maximum decrease of a few percent in the net energy required to produce an increment of strain, dependent upon confining pressure.