<p>This study investigates fault reactivation mechanisms in faulted reservoirs during CO₂ injection using a fully coupled flow-deformation analysis employing the three-dimensional Distinct Element Code (3DEC). The 3D DEM explicitly represents faults and joints as discontinuities, which allows localized slip, block rotation, and opening along the fault plane to be captured more realistically than in conventional continuum models. A base case analysis revealed localized deformation with maximum fault slip of 2.24 × 10⁻³&#xa0;m and displacement magnitudes reaching 1.38 × 10⁻³&#xa0;m near the fault core. Parametric analysis explored variations in host rock strength, in situ stress ratios, fault orientation, and fluid properties. Results showed that low-dipping angle faults (15°) exhibited the highest displacement (1.07 × 10⁻²&#xa0;m), while increasing in situ stress ratios (k = 2.5) significantly stabilized faults by reducing vertical displacement. Fluid dynamics influenced pressure evolution, with higher injection rates amplifying transient pore pressures, destabilizing faults, and increasing leakage risks. These findings emphasize the critical role of fault geometry, stress conditions, and injection strategies in controlling fault stability. This study offers actionable insights for optimizing CO₂ storage site selection and injection practices to mitigate risks of fault reactivation and induced seismicity.</p><p><b>Highlights</b><UnorderedList Mark="Bullet"> <ItemContent> <p>Use of a comprehensive numerical analysis to demonstrate the caprock breach and fault activation mechanisms</p> </ItemContent> <ItemContent> <p>Application of three-dimensional modeling versus general practice in CO₂ storage</p> </ItemContent> <ItemContent> <p>Providing geo-mechanical design guidelines for safe CO₂ storage</p> </ItemContent> </UnorderedList></p>