Fault damage zones in porous sandstones commonly exhibit networks of deformation bands reflecting crushing and reorganization of grains associated with small-scale, localized displacement. Deformation bands introduce anisotropic, order-of-magnitude reduction of effective permeability, which will affect fluid flow in reservoir rocks. We here present a method for incorporating these features in industrial-type reservoir models. The method involves the use of a three-dimensional fault zone grid generation technique that allows property modeling on a discrete high-resolution fault zone grid without refining the entire reservoir model. Deformation band data from 106 outcrop scan lines of fault damage zones were classified into discrete fault facies defined according to deformation band density. The distributional pattern of fault facies in the data exhibits recurrent spatial relationships, which could be reproduced using truncated Gaussian simulation in the modeling process. The frequency distribution of deformation band density for each facies was analyzed, and average density values were assigned to each facies for calculating cell permeability. Permeability anisotropy was handled by approximating the relationship between deformation band densities in different directions based on published high-resolution fault zone maps and cross sections. Fluid-flow simulations were carried out on several damage zones models, and results were benchmarked against models with conventional fault rendering without damage zones. Simulation results show that flow paths, remaining oil distribution, and reservoir responses in models incorporating damage zones deviate from models employing conventional fault representation without damage zones, and these differences increase as deformation band permeability decreases.