Gypsum, an anisotropic hydrous mineral, localizes strain through dehydration‐induced embrittlement and hydrodynamic lubrication, affecting the deformation in active tectonic settings. Here, we examine the micromechanical status of syn‐ and post‐dehydration gypsum‐phases, crucial for understanding intra‐crystalline deformation. We micro‐indented the (010) planes of natural gypsum crystals from 30 to 140°C at various strain‐rates to track mechanical changes during progressive dehydration and phase transition. Thermogravimetric analyses reveal that gypsum dehydrates between 100 and 140°C following a sigmoidal curve. Micromechanical data show, at 30°C, the mean hardness of gypsum is 2.42 GPa, reducing to 0.5 GPa at 140°C, after complete dehydration. Following the sigmoidal dehydration trend, elastic modulus, fracture toughness, and yield stress likewise drops with progressive dehydration. The Gypsum‐Hemihydrate phase exhibits strain‐rate sensitive elastoplastic deformation between 30 and 110°C, as hardness decreases with increasing strain‐rate. We propose that delamination of the layers and extensive tensile cracking along [010] cause this strain‐rate sensitive behavior, displaying Indentation Size Effect. Dehydrated phases (Hemihydrate and γ‐Anhydrite) are formed as exfoliated pseudomorphic flakes through topotactic transformation along [010] and show two sets of oppositely dipping slip systems. During the late dehydration stage (120–140°C), plastic strain is accommodated by the sliding of these flakes along with inelastic pore compaction, resulting in strain‐rate insensitive plastic deformation of the system.