We model mudstone permeability during consolidation and grain rotation, and during fluid injection by simulating porous media flow using the lattice Boltzmann method. We define the mudstone structure using clay platelet thickness, aspect ratio, orientation, and pore widths. Over the representative range of clay platelet lengths (0.1–3 μm), aspect ratios (length/thickness = 20–50), and porosities (ϕ = 0.07–0.80) our permeability results match mudstone datasets well. Homogenous kaolinite and smectite models document a log linear decline in vertical permeability from 8.31 × 10−15–6.84 × 10−17 m2 at ϕ = 0.76–0.80 to 6.33 × 10−19–1.30 × 10−23 m2 at ϕ = 0.14–0.16, showing good correlation with experimental data (R2 = 0.42 and 0.56).We employ our methodology to predict the permeability of two natural mudstone samples composed of smectite, illite, and chlorite grains. Over ϕ = 0.32–0.58, the permeability trends of two models replicating the mineralogical composition of the natural mudstone samples match experimental datasets well (R2 = 0.78 and 0.74). We extend our methodology to evaluate how vertical permeability might evolve during microfracture network growth or macrofracture propagation upon fluid injection in compacted mudstone. Fluid injection results in a permeability increase from 1.02 × 10−20 m2 at ϕ = 0.07 to 2.07 × 10−16 m2 at ϕ = 0.29 for growth of a microfracture network, and from 1.02 × 10−20 m2 at ϕ = 0.07 to 1.23 × 10−16 m2 at ϕ = 0.32 for macrofracture propagation. Our results suggest that a distributed microfracture network results in greater permeability during fluid injection in compacted mudstones (ϕ = 0.07–0.32) in comparison to a wide macrofracture. Our modeling approach provides a simple means to estimate permeability during burial and compaction or fluid injection based on knowledge of porosity and mineralogy.