A new model, stress-gradient plasticity, is presented that provides unique mechanistic insight into size-dependent phenomena in plasticity. This dislocation-based model predicts strengthening of materials when a gradient in stress acts over dislocation source-obstacle configurations. The model has a physical length scale, the spacing of dislocation obstacles, and is validated by several levels of discrete-dislocation simulations. When incorporated into a continuum viscoplastic model, predictions for bending and torsion in polycrystalline metals show excellent agreement with experiments in the initial strengthening and subsequent hardening as a function of both sample-size dependence and grain size, when the operative obstacle spacing is proportional to the grain size.