The H2O storage capacity of nominally anhydrous minerals or rocks is the concentration of water that can be sequestered in the mineral(s) without stabilizing a hydrous fluid or melt. The storage capacity of the upper mantle is considerably greater than generally appreciated, as recent studies show that H2O uptake in olivine is ∼3 times that originally inferred by Kohlstedt et al. [D.L. Kohlstedt, H. Keppler, D.C. Rubie, Solubility of water in the α, β and γ phases of (Mg,Fe)2SiO4, Contrib. Mineral. Petrol. 123 1996 345-357.] and, at least at low pressure, pyroxene stores considerably more H2O than olivine. Consequently, H2O has smaller influence on small degree melting than inferred previously. Combining data on the storage capacity of olivine with constraints on partition coefficients between olivine, pyroxene, and garnet, we estimate that the storage capacity of the upper mantle just above the 410 km discontinuity is > 0.4 wt.%. Owing to the increasing mode of garnet at the expense of pyroxene, there is likely to be a local maximum in storage capacity between 350 and 400 km, and a local minimum just above the onset of wadsleyite stability. Although published data suggest that the storage capacity of wadsleyite diminishes with increasing temperature, the storage capacity of the transition zone likely is considerable because Fe-bearing wadsleyite has a larger storage capacity than Mg2SiO4. Peridotite upwelling from the transition zone will undergo partial melting above the 410 km discontinuity only if it has more H2O than the local storage capacity (i.e., > 0.4 wt.%), and the dehydrated residue cannot be drier than this unless it melts further under conditions where the storage capacity is less. Because residues of partial melting at 410 km have much more H2O than the 50-200 ppm H2O in the average upper mantle, they cannot be principal sources for the upper mantle. If hydrous melting occurs at 410 km, further upwelling of the residual peridotite will result in continued melting throughout the upper mantle, unless the storage capacity increases with decreasing depth. The partition coefficient of H2O between wadsleyite and olivine is ∼5, which is less extreme than previously assumed. Consequently, the effect of H2O on the depth and thickness of the 410 discontinuity may not be pronounced and typical (10 km) discontinuity thickness can be reconciled with up to ∼400 ppm H2O.