Shear instability behavior is typical failure mode of rock mass in civil and mining engineering. Many attempts have been performed for rock joints or nonpersistent rock bridge under static shear conditions, yet the shear failure of rock mass subjected to cyclic or fatigue shear conditions is not well understood. Multilevel cyclic shear (MLCS) loading experiments were carried out on freeze-thawed hornfels to reveal the fracture and energy evolution characteristics using a self-special designed rock dynamic shear testing apparatus. The effect of the preexisting natural fracture on rock shear strength, deformation, energy dissipation, and shear failure pattern were experimentally investigated. The testing results show that aperture of open-mode fractures increases quickly, and this kind of natural fracture contributed a lot to rock failure. The evolution of stress hysteresis loop and its pattern are impacted by natural fracture, and it determines the damage accumulation. In addition, a damage evolution model was proposed to describe the damage evolution defined by the dissipated energy; the model can well describe the two-stage damage propagation for each cyclic stage and the entire cyclic loading process. Good agreement was found among the irreversible strain, energy dissipation, and failure morphology that are influenced by the preexisting natural fractures. It is suggested that the rock dynamic shear failure behaviors are rock structural dependent; the disturbed stress alters the energy dissipation and release characteristics.