Although there is a growing body of data on H2O in arc magmas, there is still considerable uncertainty about the relationship between H2O and various incompatible elements during enrichment of the mantle wedge by subduction processes. We report data for H2O, other volatiles (CO2, S, Cl), and trace elements in olivine-hosted melt inclusions from high-Mg basalts in central Mexico that exhibit varying degrees of subduction-related enrichment. Most melt inclusions were trapped at low pressure, but rare inclusions (Mg# 65–78, olivine hosts Fo85–90) trapped at upper to middle crustal pressures (1–6 kbar) contain high CO2 (250–2120 ppm). The high-pressure inclusions indicate magmatic H2O contents from 1.3 to 5.2 wt%. Enrichment of H2O relative to Nb correlates positively with K/Nb, Ba/Nb, and La/Nb, indicating a clear link between H2O and trace element enrichment of the mantle wedge. Our results show that fluxing of the wedge with an H2O-rich component from the subducted slab is important in formation of magmas that are enriched in large ion lithophile (LILE) and light rare earth (LREE) elements relative to high field strength elements (HFSE). In contrast, magmas with low LILEs and LREEs relative to HFSEs have relatively low H2O, and must have formed largely by decompression melting of unmodified mantle. Our data for volcanoes <50 km apart show evidence of significant variability in the composition of H2O-rich subduction components that are added to the mantle wedge beneath central Mexico.