Failure mode prediction of hydrate-bearing sediments (HBSs) is crucial for accurate evaluation of reservoir mechanical properties and safe exploitation of hydrate resources. In this study, the variation of HBS failure mode with hydrate dissociation degree (Dhd) and effective confining stress (σ3′) and its micro-mechanism were investigated. The results show that the stress-strain curve of HBS shifts from strain-softening to strain-hardening as Dhd and σ3′ increase. The failure strength and residual strength of the sample are negatively correlated with Dhd but positively correlated with σ3′. The increase of Dhd results in a reduction in the cohesion of HBS from 608.74 to 2.49 kPa and a shift in the internal friction angle from increasing to decreasing. The post-shear sample indicates a minimum porosity of 11.47% under the highest Dhd and σ3′ conditions. The increased pore volume available for particle rearrangement resulting from the increase in Dhd, and the enhanced confining effect on the sample due to the increase in σ3′, result in a volume shrinkage characterized by plastic strain-hardening failure mode. A prediction model of HBS failure mode based on the classification of strain-hardening and strain-softening degrees of stress-strain curves was developed and verified using published results.