During the eruption of the Soufriere Hills volcano, Montserrat (1995–99), and several other dome eruptions, shallow seismicity, short-lived explosive eruptions and ground deformation patterns indicating large overpressures (of several megapascals) in the uppermost few hundred metres of the volcanic conduit have been observed. These phenomena can be explained by the nonlinear effects of crystallization and gas loss by permeable flow, which are here incorporated into a numerical model of conduit flow and lava dome extrusion. Crystallization can introduce strong feedback mechanisms which greatly amplify the effect on extrusion rates of small changes of chamber pressure, conduit dimensions or magma viscosity. When timescales for magma ascent are comparable to timescales for crystallization, there can be multiple steady solutions for fixed conditions. Such nonlinear dynamics can cause large changes in dome extrusion rate and pulsatory patterns of dome growth.