Hash aggregation operates in two phases. In the first phase, data read from underlying row source is partitioned on GROUP BY keys with on-the-fly aggregation. It is determined into which partition an entry corresponding to the incoming record should be grouped, and whether a matching entry is already present in the partition, using a hash function and a hash table built for the partition. For aggregation operations, if a match is found, then a measure value from the incoming record is aggregated with a measure value for the entry existing in the partition. If there is not enough system volatile memory to complete the first phase, then a partition is selected for storing persistently. Thus, only one partition at a time is stored persistently, as necessary. In the second phase, one persistently stored partition is processed at a time, whereby aggregation of the data in that partition is completed and results are returned.