Interaction of the elastic lithosphere with the underlying anelastic asthenosphere causes strain to propagate along the Earth's surface in a diffusion-like manner following tectonism at plate boundaries. This process transfers stress between adjacent tectonic segments and influences the temporal tectonic pattern along a plate boundary. Observations of such strain transients have been rare, and have hitherto been confined to strike-slip and underthrusting plate boundaries1. Here we report the observation of a strain transient at the divergent (spreading) plate boundary in Iceland. A Global Positioning System survey undertaken a decade after an episode of dyke intrusion accompanying several metres of crustal spreading reveals a spatially varying strain field with the expected diffusion-pulse shape and an amplitude three times greater than the 5.7 cm that would be expected from the average spreading rate2. A simple one-dimensional model with a thin elastic layer overlying a viscous layer fits the data well and yields a stress diffusivity of 1.1 ?? 0.3 m2 s-1. Combined with struc-tural information from magnetotelluric measurements, this implies a viscosity of 0.3-2 ?? 1019 Pa s - a value comparable to that derived for Iceland from post-glacial rebound23, but low compared with estimates for mantle viscosity obtained elsewhere3.