A micromechanical model is proposed for plastic deformation and damage in hard clay called argillite. The argillite is considered as a two phase composite with the clay matrix and mineral inclusions. The clay matrix is described by an elastoplastic damage model while the inclusions are considered as linear elastic media. The macroscopic inelastic behavior of material is determined using Hill's incremental method and a Mori–Tanaka scheme for the linear comparison composite. The validity of the proposed model is verified through comparisons with experimental data for various laboratory tests. Influences of microscopic deformation mechanisms on macroscopic behavior are discussed.