Shear-dilation-based hydraulic stimulations can enable commercial exploitation of geothermal energy from reservoirs with inadequate initial permeability. While contributing to enhancing the reservoir's permeability, hydraulic stimulation processes may also lead to undesired seismic activity. Here we present a three-dimensional numerical model aiming to aid increased understanding of shear-dilation based hydraulic stimulation and its consequences. The fractured reservoir is modeled as a network of explicitly represented large-scale fractures immersed in a permeable rock matrix. The numerical formulation is constructed by coupling three physical processes: fluid flow, fracture deformation, and rock matrix deformation. For flow simulations, the discrete fracture-matrix model is used, which allows fluid transport from high-permeable conductive fractures to rock matrix and vice versa. The mechanical behavior of the fractures is modeled with reversible and irreversible deformations corresponding to elastic deformation and slip. Linear elasticity is assumed for mechanical deformation and stress alteration of the rock matrix. Fractures are modeled as lower-dimensional surfaces embodied in the domain, subjected to specific governing equations for their deformation along the tangential and normal directions. Both the fluid flow and momentum balance equations are approximated by finite volume discretizations. The new numerical model is demonstrated considering a three-dimensional fractured formation with a network of 20 explicitly represented fractures. The effects of fluid exchange between fractures and rock matrix on the permeability evolution and the generated seismicity are examined for test cases resembling realistic reservoir conditions. Numerical modeling of the shear stimulation can be a powerful tool for estimating the potential performance of the stimulated reservoir, for understanding governing mechanisms, and/or for forecasting possible undesired by-products of the stimulation process. However, due to the complex structure of the fractured rock and the number of coupled physical processes involved in the stimulation process, many modeling aspects remain unresolved. Challenges include the description of the mechanical and hydraulic behavior of the UCAR ET AL. 3891