The stability of San Carlos olivine (Fo 90.5) relative to changes in oxygen fugacity at 1300 ¿C has been determined by studying the microstructural changes in single crystals using transmission and analytical electron microscopy. The first detectable metallic phase, heterogeneously nucleated along dislocations within (100) and (001) subboundaries, had a composition Ni65Fe35 equilibrated with a CO/CO2 gas mixture having an oxygen fugacity f02 of 10-5.6 Pa. Although the (100) subboundaries contained a high density of dislocations with Burgers vector <100>, the nucleation sites were restricted to <010> and <001> dislocations: a result consistent with the theory of heterogeneous nucleation along dislocations. Under the reducing conditions of an fO2 of 10-12 Pa, a forsteritic olivine is produced at the gas-mineral interface with a high density of metallic precipitates (Fe96Ni4) homogeneously nucleated in the olivine. Nonstoichiometry of the olivine was inferred from the absence of any additional silica-rich phases. The nonstoichiometry was analyzed in terms of possible crystalline defect structures, especially vacancies, assuming no evaporative losses from the surface except an oxygen exchange reaction. On the basis of the model proposed, the highly reduced olivine would contain an excess of SiO2 (xSiO2 =0.355 compared with a stoichiometric value of 0.333) from the surface to a depth of several micrometers.