Abstract Faults represent a critical heterogeneity in basaltic sequences, yet few studies have focused on their architectural and hydromechanical evolution. We present a detailed, multi-scale characterization of passively exhumed fault zones from the layered basalts of the Faroe Islands, which reveals cyclic stages of fault evolution. Outcrop-scale structures and fault rock distribution within the fault zones were mapped in the field and in 3-D virtual outcrop models, with detailed characterization of fault rock microstructure obtained from optical and scanning electron microscopy. The fault zones record deformation localization from decameter-wide Riedel shear zones into meter-wide fault cores that contain multiple cataclastic shear bands and low-strain lenses organized around a central slip zone. Shear bands and the slip zone consist of (ultra-) cataclasites with a zeolite-smectite assemblage replacing the original plagioclase-pyroxene host rock composition. Low-strain lenses are breccias of weakly altered host rock or reworked fault rocks. Slip zone-proximal zones show significant late-stage dilatation in the form of hydrothermal breccias or tabular veins with up to decimeter apertures. We interpret these structures as evolving from alternating shear-compaction and dilation through hydrofracture. The fault core preserves slip zone reworking, which is interpreted to indicate repeated shear zone locking and migration. The alternating deformation styles of shear-compaction and dilatation suggest episodic changes in deformation mechanisms driven by transient overpressure and release. The fault zone mechanical properties are thus governed by the combined effects of permanent chemical weakening and transient fluid-mediated mechanical weakening, alternating with cementation and healing. We suggest that the model presented for fault evolution should apply widely to shallow, basalt-hosted fault zones.