Nanometre-scale contact experiments and simulations demonstrate the potential to probe incipient plasticity--the onset of permanent deformation--in crystals. Such studies also point to the need for an understanding of the mechanisms governing defect nucleation in a broad range of fields and applications. Here we present a fundamental framework for describing incipient plasticity that combines results of atomistic and finite-element modelling, theoretical concepts of structural stability at finite strain, and experimental analysis. We quantify two key features of the nucleation and subsequent evolution of defects. A position-sensitive criterion based on elastic stability determines the location and character of homogeneously nucleated defects. We validate this stability criterion at both the atomistic and the continuum levels. We then propose a detailed interpretation of the experimentally observed sequence of displacement bursts to elucidate the role of secondary defect sources operating locally at stress levels considerably smaller than the ideal strength required for homogeneous nucleation. These findings provide a self-consistent explanation of the discontinuous elastic plastic response in nanoindentation measurements, and a guide to fundamental studies across many disciplines that seek to quantify and predict the initiation and early stages of plasticity.