The Furnas volcano, São Miguel island, Azores is an active stratovolcano, with a 6‐km‐diameter caldera. In order to mitigate volcanic risk in the area, crustal deformation research based on optical leveling tilt measurements and lake leveling was initiated at the volcano in 1991. Progressive tilt as high as 4 µrad/yr has been observed, but the measurements do not all fit a simple model. The Global Positioning System (GPS) was used to measure a network of fourteen stations at the volcano in 1993, and again in 1994. Horizontal displacements in the one year period between the surveys are less than 1 cm, but significant with 95% confidence. Stations are being displaced away from the caldera and strain analysis indicates areal dilation of 0.84±0.40 µstrain/yr of the volcanic edifice. The areal dilation can be explained by slight inflation of the volcano. The location of the center of inflation is rather uncertain, but based on both the GPS and the leveling data the preferred location is in the northern part of the caldera. A central uplift rate of >7 mm/year is suggested.