Abstract Single‐crystalline nanoparticles play an increasingly important role in a wide variety of fields including pharmaceuticals, advanced materials, catalysts for fuel cells, energy materials, as well as environmental detection and monitoring. Yet, the deformation mechanisms of very small nanoparticles are still poorly understood, in particular the role played by single dislocations and their interaction with surfaces. In this work, silver nanoparticles with particularly small dimensions (≈20 nanometers in diameter) are compressed in situ in an aberration‐corrected transmission electron microscopy (TEM) and molecular dynamics (MD) simulations. During compression, the emergence of both dislocations and nanotwins are observed. However, these defects prove to be unstable and disappear upon removal of the indenter. Atomistic simulations confirm the role played by image stresses associated with the nearby surfaces and the reduction in dislocation line length as it approaches the free surface, thereby supporting the experimental observations. These results provide justification for the frequent observation of the absence of dislocations in nanoparticles of a few nanometers in size during in situ experiments, even after significant deformation. This phenomenon contributes to the self‐healing of samples through dislocation ejection toward the surfaces.