Abstract. Leavitt path algebras L of an arbitrary graph E over a field K satisfying a polynomial identity are completely characterized both in graphtheoretic and algebraic terms. When E is a finite graph, L satisfying a polynomial identity is shown to be equivalent to the Gelfand-Kirillov dimension of L being at most one, though this is no longer true for infinite graphs. It is shown that, for an arbitrary graph E, the Leavitt path algebra L has Gelfand-Kirillov dimension zero if and only if E has no cycles. Likewise, L has Gelfand-Kirillov dimension one if and only if E contains at least one cycle, but no cycle in E has an exit.