Serpentinite fault rheology is fundamental to tectonic and earthquake processes, yet links between deformation textures and strength evolution during fault initiation are poorly constrained. Here I present field and petrographic microstructural observations of unsheared and sheared serpentinite that demonstrate a progression of fault development. I compliment observations with a clast size distribution analysis to investigate the evolution of fault rigidity, and a numerical model to query the stress distribution of a clast-in-matrix geometry. Unsheared microstructures reveal well-aligned, elongate serpentine in the matrix and short, randomly-oriented serpentine in clasts. Sheared matrix displays cataclastic textures, discrete brittle surfaces, dissolution bands and ductile textures defined by anastomosing networks of well-aligned, fine-grained serpentine. During fault initiation, matrix serpentine anisotropy promotes slip on basal planes or fiber aggregates, and clast-on-clast interactions drive a high bulk viscosity prone to stick-slip behavior. As deformation progresses clast fracturing is focused at clast tips and smaller clasts are preferentially removed by dissolution-precipitation processes, increasing the relative abundance of matrix. Strain is continually focused in the matrix and as clast content reduces the bulk viscosity drops. This study reveals that viscosity contrasts formed by primary serpentinization textures are a major driver for the development and strength evolution of faults. On a continental-scale, similar processes may govern earthquake distributions, fault growth and segmentation patterns on young, serpentinite-hosted faults.