The role of friction between the indenter and the test specimen in amorphous and crystallized Pd40Cu30Ni10P20 alloy was investigated through instrumented nanoindentation under unlubricated and lubricated conditions. It was found that the reduction of hardness with the increasing penetration depth, i.e., the indentation size effect (ISE), becomes milder in the lubricated test than that in the unlubricated measurement. The important role of friction that related to the surface area to volume (S/V) was discussed in terms of the proportional specimen resistance (PSR) model and energy dissipation.