Abstract. ISO/SWS observations of Orion Peak 1 and Peak 2 show strong emission in the ro-vibrational lines of CO v = 1−0 at 4.45-4.95 µm and of H2O ν2 = 1−0 at 6.3-7.0 µm. Toward Peak 1 the total flux in both bands is, assuming isotropic emission, ≈2.4 and ≈0.53 L , respectively. This corresponds to ≈14 and ≈3% of the total H2 luminosity in the same beam. Two temperature components are found to contribute to the CO emission from Peak 1/2: a warm component, with T k = 200-400 K, and a hot component with T k ∼ 3 × 10 3 K. At Peak 2 the CO flux from the warm component is similar to that observed at Peak 1, but the hot component is a factor of ≈2 weaker. The H2O band is ≈25% stronger toward Peak 2, and seems to arise only in the warm component. The P -branch emission of both bands from the warm component is significantly stronger than the R-branch, indicating that the line emission is optically thick. Neither thermal collisions with H2 nor with H I seem capable of explaining the strong emission from the warm component. Although the emission arises in the postshock gas, radiation from the most prominent mid-infrared sources in Orion BN/KL is most likely pumping the excited vibrational states of CO and H2O. CO column densities along the line of sight of N(CO) = 5-10×10 18 cm −2 are required to explain the band shape, the flux, and the P -R-asymmetry, and beam-filling is invoked to reconcile this high N(CO) with the upper limit inferred from the H2 emission. CO is more abundant than H2O by a factor of at least 2. The density of the warm component is estimated from the H2O emission to be ∼2 × 10 7 cm −3 . The CO emission from the hot component is neither satisfactorily explained in terms of non-thermal (streaming) collisions, nor by resonant scattering. Vibrational excitation through collisions with H2 for densities of ∼3 × 10 8 cm −3 or, alternatively, with atomic hydrogen, with a density of at least 10 7 cm −3 , are invoked to explain simultaneously the emission from the hot component and that from the high excitation H2 lines in the same beam. A jump shock is most probably responsible for this emission. The emission from the warm component could in principle be explained in terms of a C-shock. The underabundance of H2O relative to CO could be the consequence of H2O photodissociation, but may also indicate some contribution from a jump shock to the CO warm emission.