Water transported in subducting oceanic plates plays a key role in a number of phenomena, including intraslab seismicity and arc magmatism. However, the locus of plate hydration and water distribution in crust and mantle of plates entering subduction zones is debated. We present evidence for anomalously low seismic velocities and densities of the crust and upper mantle of the Nazca plate at the north Chile trench. Crustal seismic velocities at the trench are lower than velocities of mature fast-spreading crust and even lower than velocities of highly extended slow-spreading crust. In addition, the Nazca plate at the north Chile trench may contain an ∼20-km-thick upper-mantle layer with ∼17% serpentine, which implies ∼2.5 wt% water. These results document pervasive rock alteration by water percolation linked to bending-related extensional faulting.