We investigated the frictional sliding behavior of simulated quartz-clay gouges under stress conditions relevant to seismogenic depths. Conventional triaxial compression tests were conducted at 40 MPa effective normal stress on saturated saw cut samples containing binary and ternary mixtures of quartz, montmorillonite, and illite. In all cases, frictional strengths of mixtures fall between the end-members of pure quartz (strongest) and clay (weakest). The overall trend was a decrease in strength with increasing clay content. In the illite/quartz mixture the trend was nearly linear, while in the montmorillonite mixtures a sigmoidal trend with three strength regimes was noted. Microstructural observations were performed on the deformed samples to characterize the geometric attributes of shear localization within the gouge layers. Two micromechanical models were used to analyze the critical clay fractions for the two-regime transitions on the basis of clay porosity and packing of the quartz grains. The transition from regime 1 (high strength) to 2 (intermediate strength) is associated with the shift from a stress-supporting framework of quartz grains to a clay matrix embedded with disperse quartz grains, manifested by the development of P-foliation and reduction in Riedel shear angle. The transition from regime 2 (intermediate strength) to 3 (low strength) is attributed to the development of shear localization in the clay matrix, occurring only when the neighboring layers of quartz grains are separated by a critical clay thickness. Our mixture data relating strength degradation to clay content agree well with strengths of natural shear zone materials obtained from scientific deep drilling projects.