AbstractCrack interactions leading to shear localization were quantified using microstructural analysis for brittle faults and high‐temperature ductile faults formed during experiments on quartz sandstone. In both faulting regimes, the nucleation of macroscopic faults results from the interactions of microfractures at two length scales in ensemble. Brittle faults nucleate when the longest mesoscale shear fractures and transgranular tensile cracks critically interact. In contrast, ductile faults nucleate when the longest mesoscale shear fractures and multi‐grain scale intergranular shear cracks critically interact. For both faulting regimes, we conclude the interaction and coalescence of the longest mesoscale shear fractures is the fundamental process responsible for fault nucleation. Hence, mesoscale shear fractures, which accommodate the majority of axial strain prior to shear localization in both faulting regimes, also serve as the nucleus of macroscopic faults. Locally, the growth of the mesoscale shear fractures is promoted by the interaction and coalescence of the multi‐grain scale cracks in both faulting regimes. We hypothesize that attainment of a critical microstructure for shear localization (i.e., local clustering of the longest microfractures) requires a characteristic amount of plastic axial strain, which depends on deformation conditions. In brittle faulting, distributed microfracturing is confined within limited regions of the rock volume, which expedites crack clustering and fault nucleation at low characteristic strains. In ductile faulting, distributed microfracturing occurs more uniformly throughout the rock volume, delaying shear localization to high characteristic strains. Accurate prediction of shear localization requires models that describe crack interactions of the largest flaws that account for crack clustering.