Hydraulic fracturing promotes the shale gas revolution worldwide. Since most of the fracturing fluids used now are water-based, shale hydration could happen before and after the treatment. However, the effects of shale hydration on hydraulic fracture initiation, fracture complexity, and proppant distribution have not been clarified. Thus, we performed shale hydration experiments on thin discs and cubic specimens under confining conditions to investigate the microstructure evolution through the scanning electron microscope (SEM) and acoustic emission (AE) system. Later, the hydrated cubic specimens were fractured to examine the impact of shale hydration on hydraulic fracturing through CT scanning. The results show that under confining conditions, water imbibition volume increases with time, but the effect of the fluid pressure inside the perforation on shale hydration is limited. The SEM images show that the preexisting microfractures extend at the beginning but stop growing with width reduction in 6 h, which is indirectly evidenced by the AE. The confining pressure inhibits the preexisting microfractures from opening and further propagation, resulting in closure of the microfractures near the perforation and the water imbibition stagnating. Those findings obtained from hydration experiments are verified by the hydraulic fracturing experiments, which show that the breakdown pressure increases with shale hydration. Meanwhile, the CT scanning shows that the fractures initiated from the vertical perforation become more complex after hydration, which leads to the width reduction of individual fractures and, consequently, poor proppant distribution. Therefore, it is suggested to utilize the optimal hydration time when microfractures expand or use clay inhibitors to decrease the breakdown pressure and facilitate the proppant placement. Imbibition time plays a key role in shale hydration, but the effect of fluid pressure is limited.Microfractures extend in the early stage of shale hydration and finally close due to confining pressure.Breakdown pressure increases in the hydrated shale after 6-h hydration under confining conditions (25-18-3 MPa).Due to stress condition differences, more complex near-wellbore fractures form in vertical perforations than in horizontal ones after hydration.Complexity of the near-wellbore fracture patterns cause poor proppant distribution for the hydrated specimens with a vertical perforation.