Underground excavation in water-rich rock masses necessitates addressing the risks of rock degradation and instability induced by hydro-mechanical (H-M) coupling. This study simulated the in situ stress conditions of shallow to medium-depth surrounding rock (800–1500m) and conducted a series of triaxial compression tests on water-saturated sandstone under various H-M coupling gradients ( \({\sigma }_{3}\) = 10–20 MPa; Pw = 2–12 MPa), investigating the mechanical behavior, permeability evolution, energy dissipation, and damage characteristics under H-M interaction. The results indicate that with increasing H-M coupling intensity, \({\sigma }_{\text{cc}}\) , \({\sigma }_{\text{ci}}\) , \({\sigma }_{\text{cd}}\) , \({\sigma }_{\text{cp}}\) and E0 exhibit decreasing trends, with their reduction rates positively correlated with confining pressure; meanwhile, ν, Kcr, and Kcp increase, with the growth rate of ν being positively correlated to confining pressure, while those of Kcr and Kcp are negatively correlated. Energy competition demonstrates nonlinear behavior, well characterized by a quadratic function. Energy dissipation exhibits multi-stage threshold characteristics, including a polarity reversal near the volumetric strain inflection point ( \({\overline{\varepsilon }}_{1}\) ≈54.53%), consistent with Griffith’s energy criterion. A dual-threshold damage model incorporating an energy breakthrough mechanism for crack propagation is proposed. Compared to existing models, it more accurately captures the full-range nonlinear deformation behavior (MAE = 1.4%) and systematically reveals the synergy between micro-crack initiation and macro-crack propagation. The results provide critical theoretical support for disaster prevention and control in rock engineering and offer new insights into modeling H-M coupled damage in rock masses.