A unique size-dependent strain hardening mechanism, that achieves both high strength and ductility, is demonstrated for penta-twinned Ag nanowires (NWs) through a combined experimental-computational approach. Thin Ag NWs are found to deform via the surface nucleation of stacking fault decahedrons (SFDs) in multiple plastic zones distributed along the NW. Twin boundaries lead to the formation of SFD chains that locally harden the NW and promote subsequent nucleation of SFDs at other locations. Due to surface undulations, chain reactions of SFD arrays are activated at stress concentrations and terminated as local stress decreases, revealing insensitivity to defects imparted by the twin structures. Thick NWs exhibit lower flow stress and number of distributed plastic zones due to the onset of necking accompanied by more complex dislocation structures.