A 6-year long GPS observation (1998-2003) indicates that crustal deformation in the Three Gorges area is less active at a marginally measurable rate of 0-5 mm/a relative to stable South China block. However, the impounding water in June 2003 has induced transient displacement at the Three Gorges dam and the emerging reservoir. GPS measurements after the first stage of water filling of the reservoir demonstrate that vertical subsidence close by Yangtze River is about 10-40 mm, and the horizontal displacement is less than 5-10 mm. The maximum subsidence induced by the impoundment is located in the segment of the reservoir from Maoping to Xiangxi. The water loading-induced deformation diminishes rapidly with the distance from banks of the reservoir. The overall pattern of transient deformation is consistent with the simulation result of Farrell, and is attributed to the elastic response of upper lithosphere crust to overlying water reservoir.