Artificially stacking 2D materials (2DMs) into vdW heterostructures creates materials with properties not present in nature that offer great potential for various applications such as flexible electronics. Properties of such stacked structures are controlled largely by the interfacial interactions and the structural integrity of the 2DMs. In spite of their crucial roles, interfacial stress transfer and the failure mechanisms of the vdW heterostructures, particularly during deformation, have not been well addressed so far. In this work, the interfacial stress transfer and failure mechanisms of a MoS2/graphene vdW heterostructure are studied, through the strain distributions both laterally in individual 2DMs and vertically across different 2DMs revealed in-situ. The fracture of the MoS2 and the associated states of stress and strain are monitored experimentally. This enables various interfacial properties, such as the interfacial shear strength and interfacial fracture energy, to be estimated. Based only on the measured strength and interfacial properties of a single vdW heterostructure, a failure criterion is proposed to predict the failure mechanisms of similar vdW heterostructures with any lateral dimensions. This work provides an insight to the deformation micromechanics of vdW heterostructures that are of great value for their miniaturization and applications, especially in flexible electronics.