Internal friction and elastic aftereffect measurements have been made on wire specimens of an Al‐20% Ag alloy at various stages in the precipitation process. A specimen quenched from the solid solution region and aged at 155°C shows an internal friction peak at 140°C for a vibration frequency of 0.25 cps. The relaxation strength associated with the peak is about 0.02. The peak is not greatly affected by further anneals although these anneals completely change the character of the precipitate from the initial spherical clusters of solute atoms to the plate‐like transition (&ggr;′) precipitate. In the temperature range in which clusters redissolve (reversion), however, the internal friction shows a temperature hysteresis. The activation energy associated with the internal friction peak falls in the range 25–27 kcal/mole, depending on the state of precipitation. A mechanism is suggested whereby the peak originates in a stress‐induced change in the local extent of precipitation. This behavior results from the interaction of the applied stress with the internal stresses about precipitate particles. In terms of this mechanism one can account qualitatively for the principal experimental observations.