The strength of the lithosphere is typically modelled based on constitutive equations for steady-state flow. However, strain hardening may cause significant evolution of strength in the colder load-bearing portion of the lithosphere. Recent rheological data from low-temperature deformation experiments on olivine suggest that strain hardening occurs due to the presence of temperature-independent back stresses generated by long-range elastic interactions among dislocations. These interpretations provided the basis for a flow law that incorporates hardening by the development of back stress. Here, we test this dislocation-interaction hypothesis by examining the microstructures of olivine samples deformed plastically at room temperature either in a deformation-DIA apparatus at differential stresses of ≤4.3GPa or in a nanoindenter at applied contact stresses of ≥10.2GPa. High-angular resolution electron backscatter diffraction maps reveal the presence of geometrically necessary dislocations with densities commonly above 1014m−2 and intragranular heterogeneities in residual stress on the order of 1 GPa in both sets of samples. Scanning transmission electron micrographs reveal straight dislocations aligned in slip bands and interacting with dislocations of other types that act as obstacles. The resulting accumulations of dislocations in their slip planes, and associated stress heterogeneities, are consistent with strain hardening resulting from long-range back-stresses acting among dislocations and thereby support the form of the flow law for low-temperature plasticity. Based on these observations, we predict that back stresses among dislocations will impart significant mechanical anisotropy to deformed lithosphere by enhancing or reducing the effective stress. Therefore, strain history, with associated microstructural and micromechanical evolution, is an important consideration for models of lithospheric strength. The microstructural observations also provide new criteria for identifying the operation of back-stress induced strain hardening in natural samples and therefore provide a means to test the applicability of the flow law for low-temperature plasticity.