We report Gravity Recovery and Climate Experiment (GRACE) satellite observations of coseismic displacements and postseismic transients from the great Sumatra-Andaman Islands (thrust event; Mw ???9.2) earthquake in December 2004. Instead of using global spherical harmonic solutions of monthly gravity fields, we estimated the gravity changes directly using intersatellite range-rate data with regionally concentrated spherical Slepian basis functions every 15-day interval. We found significant step-like (coseismic) and exponential-like (postseismic) behavior in the time series of estimated coefficients (from May 2003 to April 2007) for the spherical Slepian function's. After deriving coseismic slip estimates from seismic and geodetic data that spanned different time intervals, we estimated and evaluated postseismic relaxation mechanisms with alternate asthenosphere viscosity models. The large spatial coverage and uniform accuracy of our GRACE solution enabled us to clearly delineate a postseismic transient signal in the first 2 years of postearthquake GRACE data. Our preferred interpretation of the long-wavelength components of the postseismic avity change is biviscous viscoelastic flow. We estimated a transient viscosity of 5 ??17 Pa s and a steady state viscosity of 5 ?? 1018 - 1019 Pa s. Additional years of the GRACE observations should provide improved steady state viscosity estimates. In contrast to our interpretation of coseismic gravity change, the prominent postearthquake positive gravity change around the Nicobar Islands is accounted for by seafloor uplift with less postseismic perturbation in intrinsic density in the region surrounding the earthquake. Copyright 2008 by the American Geophysical Union.