Determining fault rheology is vital for assessing earthquake hazards, yet the mechanisms controlling fault strength, slip behaviour, and healing remain uncertain, especially in fluid-rich carbonate systems. Advances in high-resolution microscopy and isotope geochemistry reveal that crustal carbonate fault zone deformation occurs at the nanoscale, significantly impacting fault rheology throughout the seismic cycle. We integrate natural fault observations from Greece with high-velocity rotary-shear experiments to investigate nanoscale transformations in carbonate gouges. Under fluid-rich conditions and using ¹⁸O-enriched tracer fluids, experiments show near-instantaneous calcite decarbonation during slip, producing transient phases like CaO, amorphous carbon, and nanocrystalline calcite. These products govern fault strength evolution, enabling dynamic weakening independent of conventional frictional mechanisms. Natural mirror slip surfaces also display nanoscale coatings of amorphous carbon and secondary calcite nanograins, indicating similar processes occur in nature. Nanostructural evidence reveals a shift in deformation mechanisms, from grain-boundary sliding to crystal-plastic flow and dynamic recrystallisation, driving cyclic grain size reduction and strengthening. We propose that triboelectrochemical processes, triggered by slip-induced electrical potentials, may facilitate CO₂ reduction and amorphous carbon formation. These findings challenge traditional fault models by showing that weakening and healing are largely governed by chemically driven nanoscale phase changes, not just mechanical abrasion. Together, these nanoscale processes explain the formation of ultra-smooth fault surfaces and influence both co- and post-seismic fault behaviour. Our results emphasise the critical role of fluids and transient phases in seismic mechanics and advocate for integrating nano-analytics with geochemistry to better understand earthquake processes in carbonate-rich faults.