Combining environmental scanning electron microscopy (ESEM) and digital image correlation techniques, the mechanical behaviour of mudstones is studied at the scale of their composite microstructure (that is, grains of carbonate and quartz embedded in a clay matrix). A specially designed apparatus is developed to allow in-situ uniaxial compression tests on samples with controlled humidity states in the ESEM chamber. As the mechanical behavior of mudstones is sensitive to water content, two tests on samples with contrasting water contents (3.8 and 7.4 %) are performed to identify the unified mechanisms of deformation and damage. We illustrate heterogeneous local strain fields that well correlate with the microstructure of mudstones. Three types of deformation bands involving different mechanisms have been classified: orthogonal (compaction of macro-pores and closure of pre-existing cracks), parallel (micro-cracking) and inclined (shear deformation) to the uniaxial compression direction. These deformation modes are activated at different stress levels, and they strongly interact: for instance, a high-strained shear band may result in tensile micro-cracks at its tip. We also illustrate damage phenomena, particularly at the inclusion-matrix interface, which is found to be a hazardous position for nucleation of micro-cracks.