Abstract: Drilling and production would exert significant impacts on the geological environment of the gas hydrate-bearing sediments (GHBS), which may cause deformation and failure of GHBS, followed by a series of geotechnical engineering problems. Hence, an underlying understanding of mechanical properties and failure mechanism of GHBS is a prerequisite for safe production from hydrate reservoirs. This paper presents a numerical investigation into mechanical behavior and strain localization in GHBS using distinct element method (DEM). A series of biaxial compression tests on GHBS samples with different hydrate saturations were conducted, whose results showed a satisfactory agreement with experimental results. Besides, strain localization, porosity, particle rotation and bond breakage number were examined to investigate the relationships between micro variables and the evolution of shear band. The research results show that (1) DEM can effectively capture the main features of strength and deformation of GHBS; (2) hydrate saturation affects the pattern of shear band, with two shear bands developed in GHBS specimens with hydrate saturations of 26% and 40%; and with one shear band formed with hydrate saturation of 55%; (3) shear bands start during strain hardening stage, and then fully developed into shear bands in strain softening stage, which is a progressive development of deformation localization; (4) strain localization, porosity, particle rotation field show obvious inhomogeneity within and outside the shear bands; and (5) hydrate cementation has a dual effect on the initiation and development of the shear bands. Microcracks are first generated between hydrate particles due to bond breaks, and crack propagation is hindered by the bonds at sand-hydrate contacts and then motivated by the bond breaks at sand-hydrate contacts. The research results are useful for understanding the mesoscopic mechanism in deformation and failure process of GHBS.