Episodic tremor and slow‐slip events at the deep extension of plate boundary faults illuminate seismic to aseismic processes around the brittle‐ductile transition. These events occur in volumes characterized by overpressurized fluids and by near failure shear stress conditions. We present a new modeling approach based on a ductile grain size‐sensitive rheology with microfracturing and sealing, which provides a mechanical and field‐based explanation of such phenomena. We also model pore fluid pressure variation as a function of changes in porosity/permeability and strain rate‐dependent fluid pumping. The fluid‐enhanced dynamic evolution of microstructures defines cycles of ductile strain localization and implies increase in pore fluid pressure. We propose that slow‐slip events are ductile processes related to transient strain localization, while nonvolcanic tremor corresponds to fracturing of the whole rock at the peak of pore fluid pressure. Our model shows that the availability of fluids and the efficiency of fluid pumping control the occurrence and the P‐T conditions of episodic tremor and slip.