Abstract The role of disclinations in deformation behavior and structure formation of nanocrystalline materials (NCMs) is discussed. A short overview of the properties of disclination defects is given. Then a number of disclination-based models is advanced for the explanation of NCM mechanical properties. The relay dislocation–disclination model of plastic shear propagation in NCM is developed in detail. This model is based on the switching between translation and rotation deformation modes of plastic deformation. It is argued that the translation mode in NCM is due to the grain boundary dislocation sliding and the rotation mode is due to the formation of wedge junction disclinations which emerge by co-operation processes of intergrain dislocation motion or co-operative grain boundary diffusion. The dependence of deforming stress on the grain size for various grain aspect ratios is demonstrated in the case of relay dislocation–disclination mechanism operation. It is shown that the transition from one mode to another may contribute to the inverse Hall–Petch relationship observed in NCM below a critical grain size.