The collapse of a volcanic flank can be destructive and deadly. Hydrothermal alteration is common to volcanoes worldwide and is thought to promote volcano instability by decreasing rock strength. However, some laboratory studies have shown that not all alteration reduces rock strength. Our new laboratory data for altered rhyodacites from Chaos Crags (Lassen volcanic center, California, USA) show that pore- and crack-filling mineral precipitation can reduce porosity and permeability and increase strength, Young's modulus, and cohesion. A significant reduction in permeability, by as much as four orders of magnitude, will inhibit fluid circulation and create zones of high pore fluid pressure. We explored the consequences of pore fluid pressurization on volcano stability using large-scale numerical modeling. Upscaled physical and mechanical properties for hydrothermally altered rocks were used as input parameters in our modeling. Results show that a high-pore-pressure zone within a volcano increases volcano deformation and that increasing the size of this zone increases the observed deformation. Hydrothermal alteration associated with mineral precipitation, and increases to rock strength, can therefore promote pore pressurization and volcano deformation, increasing the likelihood of volcano spreading, flank collapses, and phreatic/phreatomagmatic explosions. We conclude that porosity-decreasing alteration, explored here, and porosity-increasing alteration can both promote volcano instability and collapse, but by different mechanisms. Hydrothermal alteration should therefore be monitored at volcanoes worldwide and incorporated into hazard assessments.