Rock damage during earthquake slip affects fluid migration within the fault core and the surrounding damage zone, and consequently coseismic and postseismic strength evolution. Results from the first two boreholes (Deep Fault Drilling Project DFDP-1) drilled through the Alpine fault, New Zealand, which is late in its 200–400 yr earthquake cycle, reveal a >50-m-thick “alteration zone” formed by fluid-rock interaction and mineralization above background regional levels. The alteration zone comprises cemented low-permeability cataclasite and ultramylonite dissected by clay-filled fractures, and obscures the boundary between the damage zone and fault core. The fault core contains a <0.5-m-thick principal slip zone (PSZ) of low electrical resistivity and high spontaneous potential within a 2-m-thick layer of gouge and ultracataclasite. A 0.53 MPa step in fluid pressure measured across this zone confirms a hydraulic seal, and is consistent with laboratory permeability measurements on the order of 10−20 m2. Slug tests in the upper part of the boreholes yield a permeability within the distal damage zone of ∼10−14 m2, implying a six-orders-of-magnitude reduction in permeability within the alteration zone. Low permeability within 20 m of the PSZ is confirmed by a subhydrostatic pressure gradient, pressure relaxation times, and laboratory measurements. The low-permeability rocks suggest that dynamic pressurization likely promotes earthquake slip, and motivates the hypothesis that fault zones may be regional barriers to fluid flow and sites of high fluid pressure gradient. We suggest that hydrogeological processes within the alteration zone modify the permeability, strength, and seismic properties of major faults throughout their earthquake cycles.