A series of ERS radar interferograms that collectively span the time interval from July 1992 to August 2000 reveal that a presumed magma body located 6.6 ??? 0.5 km beneath the southwest flank of the Mount Peulik volcano inflated 0.051 ??? 0.005 km3 between October 1996 and September 1998. Peulik has been active only twice during historical time, in 1814 and 1852, and the volcano was otherwise quiescent during the 1990s. The inflation episode spanned at least several months because separate interferograms show that the associated ground deformation was progressive. The average inflation rate of the magma body was ???0.003 km3/month from October 1996 to September 1997, peaked at 0.005 km3/month from 26 June to 9 October 1997, and dropped to ???0.001 km3/month from October 1997 to September 1998. An intense earthquake swarm, including three ML 4.8 - 5.2 events, began on 8 May 1998 near Becharof Lake, ???30 km northwest of Peulik. More than 400 earthquakes with a cumulative moment of 7.15 ?? 1017 N m were recorded in the area through 19 October 1998. Although the inflation and earthquake swarm occurred at about the same time, the static stress changes that we calculated in the epicentral area due to inflation beneath Peulik appear too small to provide a causal link. The 1996-1998 inflation episode at Peulik confirms that satellite radar interferometry can be used to detect magma accumulation beneath dormant volcanoes at least several months before other signs of unrest are apparent. This application represents a first step toward understanding the eruption cycle at Peulik and other stratovolcanoes with characteristically long repose periods.