The equation of state and the pressure of the I-II transition have been studied for nanocrystalline Ge using synchrotron x-ray diffraction. The bulk modulus and the transition pressure increase with decreasing particle size for both Ge-I and Ge-II, but the percentage volume collapse at the transition remains constant. Simplified models for the high-pressure structural behaviour are presented, based on the assumption that a large fraction of the atoms reside in grain boundary regions of the nanocrystalline material. The interface structure plays a significant role in affecting the transition pressure and the bulk modulus.