Hydrothermal alteration occurs in upper-mantle fault zones and significantly modifies the rheological properties of ultramafic rocks. To understand how hydrothermal alteration affects shear localization and the strength of the fault zones, we conducted simple-shear deformation experiments on water-saturated harzburgite (70 wt% olivine +30 wt% orthopyroxene) gouges sandwiched between three types of shear pistons (tungsten, yttria-stabilized zirconia, and corundum) using two deformation-DIA apparatuses at confining pressures of 1–4 GPa, temperatures of 500–580 °C, average shear strain rates of 6.1 × 10−6 s−1 to 1.0 × 10−4 s−1, and water contents of 4–30 wt%. The harzburgitic gouges with water contents of 10 and 30 wt% exhibited steady-state sliding or strain-hardening behavior, and the shear strength of the latter sample was less than one-third of that of the former sample, possibly reflecting the difference in pore fluid pressure. Olivine/orthopyroxene grains exhibit distributed microfracturing and grain rotation towards P foliation, indicating the operation of cataclastic flow. Shear displacement is also accommodated by the development of serpentine- or talc-bearing multiple shear zones including B, R1, and/or Y shears, where intense cataclasis-related grain size reduction and dissolution/precipitation occur. For experimental runs using tungsten and zirconia shear pistons, the serpentine or talc blades that wrap finer-grained and dissolved olivine/orthopyroxene grains form an interconnected network, indicative of frictional sliding or dislocation glide on their basal planes as a dominant deformation mechanism. Raman spectra of the serpentine minerals indicate that they represent antigorite with low crystallinity. These findings suggest that when deep lithospheric fault zones undergo hydrothermal alteration, deformation is controlled by competition between cataclastic flow in olivine/orthopyroxene matrix and slip or glide of antigorite or talc in semi-brittle fault zones, the predominance of which depends on the amount of the hydrous phyllosilicates and the magnitude of pore fluid pressure.