Novel indentation studies combined with in situ transmission electron microscopy correlate large load drops with instabilities involving dislocation substructure. These instabilities are captured in finite element simulations of indentation that employ quantized crystal plasticity (QCP) in the vicinity of a nanoindenter tip. The indentation load-displacement traces, slip patterns, and creation of gaps are correlated with the scale, strength, and shear strain burst imparted by slip events within microstructural cells. Large load drops (ΔP/P ∼ 25%) are captured provided these cellular slip events produce shear strain bursts ∼ 8%, comparable to 8 dislocations propagating across a 25 nm microstructural cell. The results suggest that plasticity at the submicron, intragranular scale involves violent stress redistributions, triggering multi-cell instabilities that dramatically affect the early stages of a nanoindentation test.