Summary. The technique of inversion of arrival time data from local earthquakes to determine hypocentres and velocity structure simultaneously has been applied to the Wellington region, New Zealand. The subducting Pacific plate lithosphere, which here has a thicker than normal and somewhat continent-like crust, lies at 20-40 km under the area. The overlying Indian plate is broken by several major faults, one of which separates it from the accretionary border. The data used were P and S arrival times for 93 local earthquakes, four explosions, and three regional events as recorded on the 12 station telemetered Wellington seismograph network. The inversion procedure involved multiple iterations with progressively decreasing damping and an approximate, but quite good, three-dimensional ray tracing scheme. A major problem is the choosing of appropriate velocity blocks and assessing the effect of possibly inaccurate choices on the derived velocities. Starting with simple models and gradually increasing the complexity leads to a good appreciation of the information in the data and its limitations. The final velocity model is two-dimensional (plus station terms), the block boundaries drawn on the basis of seismicity and results of preceding simpler models. Both P and S velocities were determined with good resolution. This model reduces the variance of the travel-time residuals by 60 per cent compared to the one-dimensional model now used for routine processing and greatly increases the self-consistency of hypocentre determinations. The results show that the crust east of the Wairarapa fault, part of the accretionary border, has relatively low velocity, especially for S-waves, and high heterogeneity compared to the crust of the Indian plate proper. The probability of anisotropy in the mid- and lower-crust of the Indian plate complicates the interpretation, especially of a velocity reversal for S-waves from 15 to 25km depth. The gently dipping band of relatively intense seismicity parallel to the plate interface is found to be a region of high seismic velocity (an average of 7.37 km s-1 for P) and is interpreted as the lower crust of the subducting Pacific plate, the upper crust having been accreted to the plate boundary further east. Events at greater depth are occurring in mantle material with a P-wave velocity of 8.69km s-l and are probably related to bending of the subducted lithosphere.