Transient strength changes are observed in fault gouge materials when the velocity of shearing is varied. A transient stress peak is produced when the strain rate in the gouge is suddenly increased, whereas a transient stress drop results from a sudden change to a slower strain rate. We have studied the mechanism responsible for these observations by performing frictional sliding experiments on sawcut granite samples filled with a layer of several different fault gouge types. Changes in pore volume and strength were monitored as the sliding velocity alternated between fast and slow rates. Pore volume increased at the faster strain rate, indicating a dilation of the gouge layer, whereas volume decreased at the slower rate indicating compaction. These results verify that gouge dilation is a function of strain rate. Pore volume changed until an equilibrium void ratio of the granular material was reached for a particular rate of strain. Using arguments from soil mechanics, we find that the dense gouge was initially overconsolidated relative to the equilibrium level, whereas the loose gouge was initially underconsolidated relative to this level. Therefore, the transient stress behavior must be due to the overconsolidated state of the gouge at the new rate when the velocity is increased and to the underconsolidated state when the velocity is lowered. Time-dependent compaction was also shown to cause a transient stress response similar to the velocity-dependent behavior. This may be important in natural fault gouges as they become consolidated and stronger with time. In addition, the strain hardening of the gouge during shearing was found to be a function of velocity, rendering it difficult to quantify the change in equilibrium shear stress when velocity is varied under certain conditions. ?? 1989.