The Bauschinger effect in precipitation strengthened Al-Cu-Mg, Al-Zn-Mg and Al-Cu polycrystals was measured as a function of applied strain. Alloys heat treated to contain easily shearable precipitates,i.e., GPB, GP and θ″ exhibited a small Bauschinger effect, on the order of that in pure aluminum. In contrast, alloys with nonshearable precipitates, S′, η and θ′ showed an anomolously large effect. A unique hysteresis loop shape, with a region of convex curvature between sharp inflection points, was observed in the nonshear-able precipitate alloys. The large Bauschinger effect and unusual hysteresis loop shape are due to internal elastic or back stresses exerted by the strong precipitates on the matrix. A nonlinear elastic hardening model is proposed in which the overall work harden-ing is partitioned into an elastic back stress component and a frictional dislocation forest hardening term. Plastic relaxation around the precipitates and inhomogeneous deformation in the polycrystal reduces the level of the internal stresses below that predicted theoretically by the Brown and Stobbs hardening theory.