Ground uplift and earthquake swarm activity has continued around Mt. Iwate volcano, northern Japan, since February 1998. On September 3, 1998 a M6.1 earthquake occurred southwest of the volcano. Satellite radar interferometry acquired by JERS-1 reveals volcanic and coseismic deformation to the west of the summit, which is concordant with displacements observed by GPS. We analyzed geodetic observations including InSAR, GPS, and EDM to model the source of the surface deformation. The inferred model shows a 0.033 km3 volumetric increase of an inflation (Mogi) source at a depth of 7.9 km from April 1998 to the occurrence of the M6.1 earthquake. We find that the inflation increased Coulomb failure stress by 0.33 MPa (7% of the coseismic stress drop) at the hypocenter. This result suggests the inflation promoted the rupture of a known Quaternary fault. ¿ 2001 American Geophysical Union