A dynamic mechanical softening is observed in a Zr-based bulk glass-forming alloy during nanoindentation. This softening causes a so-called indentation size effect (ISE), i.e. a reduction of strength as the applied load increases. The ISE is more pronounced in the as-cast alloy than in its thermally relaxed state. These observations, together with an increase in the overall hardness after relaxation, are ascribed to the interplay between the annealing-induced reduction of free volume and the creation of excess free volume during deformation. (c) 2006 Acta Materialia Inc. Published by Elsevier Ltd. All rights reserved.