Vertical and horizontal displacements, seismicity, and local magnetic field variations observed during and after the Matsushiro earthquake swarm in central Honshu, Japan, appear to be consistent with inflation of a shallow magma reservoir within a crust containing pre-existing horizontal shear stresses. Theoretical analysis shows that increased magma pressure accompanying intrusion causes a domal uplift and also reduces the pressure in adjacent rocks. Reduced pressure implies lower frictional forces on fault planes and therefore accounts for the observed diffuse seismicity and left-lateral faulting. The coseismic increase of local magnetic field intensity is in accord with the piezomagnetic effect expected during growth of a magma inclusion; the subsequent slow decrease of the field in the five years following the swarm is explained by thermal demagnetization of host rocks. Concurrent gravity changes, although comparable to estimated errors, and spring-water outflow fluctuations are compatible with both the intrusion and dilatancy fluid-flow hypotheses.