In this study, the mechanical and hydraulic properties of sedimentary rocks are examined. The first part is focused on the analysis of the onset and propagation of damage. The formulation of the problem involves the specification of an anisotropic failure criterion as well as description of inelastic deformation, which includes the time-dependent effects. The discrete propagation of macrocracks is simulated using an enhanced constitutive law with embedded discontinuity. The framework is applied to the assessment of long-term damage around a deep-excavation in an anisotropic shale formation. In the second part, the steady state flow in the presence of embedded discontinuities/cracks is addressed by applying a modified form of Darcy’s law. The approach is illustrated by examining the flow pattern in a sedimentary rock sample that contains randomly distributed sealed fractures.