This project, a continuation of experimental and theoretical investigation of compaction and dilation band formation, examines several critical questions regarding conditions for localized band formation. Specific project activities include: 1) investigation of the influence of stress concentration on compaction band initiation/evolution, 2) investigation of the influence of bedding and anisotropy on compaction band formation, 3) examination of the localization behavior in Aztec sandstone and comparison with recent field findings, 4) investigation of dilation band formation in porous sandstone under triaxial extension, and 5) development and evaluation of two-damage mechanism based constitutive models to represent observed microstructural damage mechanisms. The experimental work, together with published data, provides a compete set of mechanical and microstructural data on porous sandstones. Further theoretical analyses examine the influence of constitutive models and stress state on localization conditions, and include incorporation of experimentally derived material parameter constraints. By synthesizing experimental and theoretical results, a model is extrapolated to predict failure modes and localization development in crustal settings for different stress states and loading paths.