The primary origin of shale-matrix mélange forming the Central Belt of the Franciscan Complex is still debated. The seacliff exposures near San Simeon display numerous lensoidal blocks of graywacke, greenstone, lesser layered chert, and blueschist that are encased in a matrix of scaly shale. The boudinaging of mafic greenstone and blueschist blocks was accommodated by cataclasis and varied amounts of metamorphic reconstitution that is particularly intense along block margins, zones of necking, and intra-block shear zones. Cataclastic zones in blueschists are greenish where chlorite and pumpellyite have formed. The mineralogic assemblage produced during cataclasis in greenstones is the same as that replacing the interior of the block: albite + chlorite + pumpellyite.The cataclastic margins of many (7 of 12) greenstones gained K, Rb, Cs, and Ba. In contrast, the cataclastic margins of all blueschist blocks lost Na, several (3 of 9) with substantial decreases, and some (3 of 9) had significant increases in K, Rb, Cs, and Ba. This metasomatic alteration is indicative of fluid-rock interaction between mafic blocks and sediments. Alteration of the mafic rocks with the growth of pumpellyite and chlorite occurred when blocks were encased in the shale matrix of the mélange, which was dynamically deforming and heated to temperatures of ~150 °C. As synsubduction temperature/depth gradients were ~10 °C/km, burial of mafic blocks while encased in the mélange matrix to depths approaching 15 km is apparent. Surficial olistostromal movements alone do not account for the incorporation, deformation, and retrograde metasomatic alteration of the exotic blueschist blocks and the metamorphism of the shale matrix at such inferred depths. These attributes indicate chemical exchange with shale and smearing displacement of the margins of mafic blocks occurred in the subduction zone as the shale matrix flowed and exerted shear tractions.