We consider a multi-pair massive multiple-input multiple-output (MIMO) relay network, where the relay is equipped with a large number, N, of antennas, but driven by a far smaller number, L, of radio frequency (RF) chains. We assume that K pairs of users are scheduled for simultaneous transmission, where K satisfies 2K = L. A hybrid signal processing scheme is presented for both uplink and downlink transmissions of the network. Analytical expressions of both spectral and energy efficiency are derived with respect to the RF chain number under imperfect channel estimation. It is revealed that, under the condition N > 4L^2/pi, the transmit power of each user and the relay can be respectively scaled down by 1=sqrt(N) and 2K=sqrt(N) if pilot power scales with signal power, or they can be respectively scaled down by 1=N and 2K=N if the pilot power is kept fixed, while maintaining an asymptotically unchanged spectral efficiency (SE). While regarding energy efficiency (EE) of the network, the optimal EE is shown to be achieved when Pr = 2KPs, where Pr and Ps respectively refer to the transmit power of the relay and each source terminal. We show that the network EE is a quasi-concave function with respect to the number of RF-chains which, therefore, admits a unique globally optimal choice of the RF-chain number. Numerical simulations are conducted to verify our observations.

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