Abstract Vertical motion in Iceland may arise from tectonic sources, e.g. large earthquakes and spreading episodes, isostatic movements owing to the change in mass of icecaps, and secular sinking of the volcanic pile under its own weight. Regional Global Positioning System (GPS) surveys covering the eastern half of Iceland have revealed the vertical motion for the period 1987–1992. Although the errors associated with the vertical component are large, exceptionally good agreement between independent data processing and agreement with isolated terrestrial measurements lends credence to the somewhat surprising results. These are dominated by relative uplift of c. 12 cm in the northern part of the Northern Volcanic Zone and subsidence of up to c. 12 cm elsewhere. This motion can be partially explained by recent tectonic and glacio-isostatic events. The most significant of these are the 1975–1984 Krafla spreading episode and isostatic uplift around the currently melting Vatnajökull icecap of c. 1 cm/year. However, a substantial amount of the observed motion cannot be explained by any known processes. It is concluded that hitherto unknown, largescale processes associated with the hotspot and plume, possibly continuing at depths of c. 75 km, may be responsible. Behaviour of this kind has been observed associated with the Yellowstone hotspot, which is broadly comparable with the Iceland hotspot. Future remeasurements of the GPS network in Iceland will be valuable for refining these observations.