A number of recent studies have used the compositional relationship between magmatic crystals and their carrier liquids to understand processes within volcanic plumbing systems. Here, an extensive compilation of electron microprobe data for Icelandic olivine and glass compositions is used to examine the distribution of the forsterite content of olivine macrocrysts within single lava flows, and the relationship of these olivines to their carrier basaltic liquids. A dataset of 7836 olivine and 233 glass point analyses was examined and 11 eruptions were identified where glass data and over 60 crystal core compositions were available. In common with many basaltic suites, single olivine crystals typically have uniform core compositions with narrow normally zoned rims. Accordingly, in 10 of the 11 Icelandic eruptions over 90% of the olivines are too forsteritic to be in equilibrium with their carrier basaltic liquids. The sampling density of the dataset permitted statistical investigation of the distribution of olivine compositions that contain information that can be used to provide new constraints on magmatic processes. The results of both kernel density estimates and Gaussian mixture modelling indicate that each of the 11 eruptions contained at least one robust peak in olivine compositions. Out of these 11 eruptions, eight show unimodal distributions of macrocryst olivine forsterite content, two are bimodal and one is polymodal. An important feature of the relationship between the carrier glass compositions and the distribution of olivine forsterite contents is that, for 10 of the 11 flows, a strong peak in the olivine compositional distribution occurs at forsterite contents that are 2–3 mol % higher than those expected for olivines in equilibrium with the carrier liquid. This offset peak is not predicted for olivines generated by simple equilibrium or fractional crystallization models. Instead, the distribution of olivine compositions and its relationship with the carrier liquids can be accounted for using a three-stage model. In the first stage, fractional crystallization and crystal settling generate a mush pile on the floor of a magma chamber. Compositional stratification is present in this mush, with the olivines at its base being more forsteritic than those at its top, reflecting the evolution of liquid compositions during fractional crystallization. The olivines in the uppermost part of the mush are close to equilibrium with basaltic liquid in the interior of the chamber. In the second stage local diffusion acts to homogenize single crystals in the mush, creating the uniform cores observed upon eruption. Concurrently the chemical gradient across the full thickness of the mush pile is altered by diffusion through the interstitial melt phase, reducing the variance of olivine core compositions in the mush. This process never reaches completion in the Icelandic flows but does generate a single peak in olivine compositions close to the mean forsterite content of the olivines in the crystal pile. Finally, the mush is disaggregated into the carrier liquid of the chamber interior shortly before eruption, creating the diffusional rim overprints. Quantitative models of this process indicate that the observed offset peak in olivine compositions can be generated after 42–8000 years of diffusion in a mush pile, depending on the mush thickness. Key features of the compositional distribution of olivines in basalts can therefore be accounted for using a simple model of mush generation and disaggregation.