Rhyolite is the most viscous of liquid magmas, so it was surprising that on 2 May 2008 at Chaiten Volcano, located in Chile's southern Andean volcanic zone, rhyolitic magma migrated from more than 5 km depth in less than 4 hours (ref. 1) and erupted explosively with only two days of detected precursory seismic activity(2). The last major rhyolite eruption before that at Chaiten was the largest volcanic eruption in the twentieth century, at Novarupta volcano, Alaska, in 1912. Because of the historically rare and explosive nature of rhyolite eruptions and because of the surprisingly short warning before the eruption of the Chaiten volcano, any information about the workings of the magmatic system at Chaiten, and rhyolitic systems in general, is important from both the scientific and hazard perspectives. Here we present surface deformation data related to the Chaiten eruption based on radar interferometry observations from the Japan Aerospace Exploration Agency (JAXA) DAICHI (ALOS) satellite. The data on this explosive rhyolite eruption indicate that the rapid ascent of rhyolite occurred through dyking and that melt segregation and magma storage were controlled by existing faults.