The effect of near-source velocity structure on the recovery of the isotropic component in moment tensor inversions is explored using a finite-difference method. Synthetic data generated using a 3D Long Valley Caldera (LVC) velocity model (Vp+/-20%) were inverted for the full moment tensor using a linear time-domain scheme utilizing Green's functions calculated from 1D models. While inversions of synthetic data with input isotropic components recovered isotropic components with 95% significance according to an F-test relative to deviatoric inversions (isotropic component constrained to zero), inversions of synthetic data with no input isotropic component recovered only nominal isotropic components with less than 75% significance. This study demonstrates near-source structure does not appear to falsely produce significant isotropic components of moment tensor inversions in the passband typically employed by regional inversion methods. ¿ 2001 American Geophysical Union