New and previously published micro-gravity data are combined with InSAR data, precise levelling and GPS measurements to produce a model for the processes operating at Krafla volcano, 20 years after its most recent eruption. The data have been divided into two periods: from 1990 to 1995 and from 1996 to 2003 and show that the rate of deflation at Krafla is decaying exponentially. The net micro-gravity change at the centre of the caldera is shown, using the measured Free Air Gradient, to be -85 µGal for the first and -100 µGal for the second period. After consideration of the effects of water extraction by the geothermal power station within the caldera, the net gravity decreases are -73 ± 17 µGal for the first and -65 ± 17 µGal for the second period. These decreases are interpreted in terms of magma drainage. Following a Mogi point source model we calculate the mass decrease to be ~2 x 10 10 kg/yr reflecting a drainage rate of ~0.23 m 3 /s, similar to the ~0.13 m 3 /s drainage rate previously found at Askja volcano, N-Iceland. Based on the evidence for deeper magma reservoirs and the similarity between the two volcanic systems, we suggest a pressure-link between Askja and Krafla at deeper levels (at the lower crust or the crust-mantle boundary). After the Krafla fires, co-rifting pressure decrease of a deep source at Krafla stimulated the subsequent inflow of magma, eventually affecting conditions along the plate boundary in N-Iceland, as far away as Askja. We anticipate that the pressure of the deeper reservoir at Krafla will reach a critical value and eventually magma will rise from there to the shallow magma chamber, possibly initiating a new rifting episode. We have demonstrated that by examining micro-gravity and geodetic data, our knowledge of active volcanic systems can be significantly improved.