A fracture-proppant system is used to mimic the interaction between the rock matrix and proppants during the process of fracture closing attributed to pore pressure reduction during hydrocarbon production. Effects of rock type and bedding plane direction are investigated. High-strength sintered bauxite proppants are placed into simulated hydraulic fractures in sandstone and shale rock. There are two bedding plane directions in shale rock; one is 90°, which is perpendicular to the fracture, while the other is 0°, which is parallel to the fracture. Increasing mechanical loading is imposed to close the fracture. Micron-scale X-ray tomography is used to visualize the internal structure. Cutting-edge imaging processing methods are applied to extract patterns of both the fracture and matrix. A pore-scale lattice Boltzmann (LB) simulator, optimized using graphics processing unit (GPU) parallel computing, is used to simulate the permeability tensor inside the fracture. Significant proppant embedment is observed in the sandstone rock when the effective stress is increased to 4,200 psi. Consequently, fracture porosity is reduced by nearly 70%, and permeability is reduced by two orders of magnitude. Embedded proppants are unable to create microscopic fractures on the matrix surface because of the low bonding strength between grains. In the shale rock with 90° bedding planes, when the effective stress is increased to 3,000 psi, significant microscopic fractures on the matrix surface are created because the lamination structure of the matrix is opened. In the shale rock with 0° bedding planes, noticeable microscopic fractures on the matrix surface are not observed until the effective stress is increased to 6,990 psi. Proppant embedment is insignificant because of the high bonding strength between fine grains. Significant anisotropy in the permeability tensor is observed during all experiments. This study is the first to use cutting-edge imaging and modeling methods to quantitatively study the interaction between proppants and the rock matrix during the stress increase process. It has important applications, which help sustain production with adequate fracture conductivity in deep reservoirs (e.g., the Haynesville shale).