The mechanical behavior of vertically aligned single-crystal GaAs nanowires grown on GaAs(111)B surface was investigated using in situ deformation transmission electron microscopy. Anelasticity was observed in nanowires with small diameters and the anelastic behavior was affected by the crystalline defects in the nanowires. The underlying mechanism for the observed anelasticity is discussed. The finding opens up the prospect of using nanowire materials for nanoscale damping applications.