The mechanical behaviour, microstructure and substructure of the classic Tännäs augen gneiss of the Swedish Caledonides are presented. Progressive deformation of granodiorite to augen gneiss and mylonite is shown to take place in an isochemical environment with redistribution of megacrysts to surrounding matrix. Experimental deformation of natural rocks from the Tännäs Augen Gneiss Nappe has been carried out in the temperature range of 20–600°C and under confining pressure of 100–700 MPa. The highest strength found is for the fine-grained mylonite. The augen of the gneiss show brittle behaviour under all test conditions, and temperature has a limited effect on the ultimate strength of the matrix of the augen gneiss. Microstructures have been analysed by means of optical microscopy and transmission electron microscopy. The progressive deformation is brought about by dislocation glide and dislocation creep. Subgrain formation, recrystallization and straining of new grains are observed at all stages of the progressive deformation of the matrix while the augen behaviour is brittle.