Based on its deformation properties, Alberta oilsands reservoir material is classified as an interlocked sands. It possesses relatively high initial friction strength and exhibits a significant dilation tendency once it is shear-mobilized. How does such a medium behave under high injection pressures? Using analytical derivations and numerical simulations, this paper illustrates the evolving shear-induced failure and tensile-dominated fracturing behavior in the oilsands. It concludes that the fracturing process is a combination of shear dilation and tensile parting at micro scales. Laboratory and field data exist to support the theoretical observations. Finally, a discussion will be given about impact of such fracturing behavior on the reservoir engineering processes. It will shed light on proactive utilization of the dilation for the in-situ oilsands development.