Recent experimental studies on nanocrystalline metals have shown that mechanical strength may decrease with decreasing grain size d for d < 10 – 15 nm. The mechanisms underlying this trend are not understood, although such a relationship is in distinct contrast to that seen in microcrystalline metals whereby strength increases with decreasing grain size. Here, we present direct experimental observations of deformation via the bubble raft model, a two-dimensional analog to fcc crystals. We adopt nanoindentation as a means to introduce localized deformation, and quantify critical conditions for defect nucleation. We identify a transitional d of approximately 7 nm, at which further grain refinement leads to a decrease in the stress required to initiate plastic deformation. Further, we observe a concurrent transition in the primary deformation mechanism from discrete dislocation emission from grain boundaries d > 7 nm to localized grain boundary migration (d < 7 nm). Thus, these data suggest that both the onset and mechanisms of plasticity in nanocrystalline materials change markedly below a critical grain size.