We present whole rock Li and Mg isotope analyses of 33 ultramafic xenoliths from the terrestrial mantle, which we compare with analyses of 30 (mostly chondritic) meteorites. The accuracy of our new Mg isotope ratio measurement protocol is substantiated by a combination of standard addition experiments, the absence of mass independent effects in terrestrial samples and our obtaining identical values for rock standards using two different separation chemistries and three different mass-spectrometric introduction systems. Carbonaceous, ordinary and enstatite chondrites have irresolvable mean stable Mg isotopic compositions (δ25Mg = -0.14 ± 0.06; δ26Mg = -0.27 ± 0.12‰, 2SD), but our enstatite chondrite samples have lighter δ7Li (by up to ~3‰) than our mean carbonaceous and ordinary chondrites (3.0 ± 1.5‰, 2SD), possibly as a result of spallation in the early solar system. Measurements of equilibrated, fertile peridotites give mean values of δ7Li = 3.5 ± 0.5‰, δ25Mg = -0.10 ± 0.03‰ and δ26Mg = -0.21 ± 0.07‰. We believe these values provide a useful estimate of the primitive mantle and they are within error of our average of bulk carbonaceous and ordinary chondrites. A fuller range of fresh, terrestrial, ultramafic samples, covering a variety of geological histories, show a broad positive correlation between bulk δ7Li and δ26Mg, which vary from -3.7‰ to + 14.5‰, and -0.36‰ to + 0.06‰, respectively. Values of δ7Li and δ26Mg lower than our estimate of primitive mantle are strongly linked to kinetic isotope fractionation, occurring during transport of the mantle xenoliths. We suggest Mg and Li diffusion into the xenoliths is coupled to H loss from nominally anhydrous minerals following degassing. Diffusion models suggest that the co-variation of Mg and Li isotopes requires comparable diffusivities of Li and Mg in olivine. The isotopically lightest samples require ~5-10 years of diffusive ingress, which we interpret as a time since volatile loss in the host magma. Xenoliths erupted in pyroclastic flows appear to have retained their mantle isotope ratios, likely as a result of little prior degassing in these explosive events. High δ7Li, coupled with high [Li], in rapidly cooled arc peridotites may indicate that these samples represent fragments of mantle wedge that has been metasomatised by heavy, slab-derived fluids. If such material is typically stirred back into the convecting mantle, it may account for the heavy δ7Li seen in some oceanic basalts.