This paper addresses the issue of the mechanical behaviour of fluid-infiltrated soils in the presence of localized deformation. The formulation of the problem is based on an averaging procedure and the conditions of full as well as partial saturation are considered. The case when both constituents (i.e., the intact and shear band material) respond in undrained manner is examined first. Later, the problem is reformulated by allowing for an exchange of fluids in constituents due to dissipation of the excess pore pressure gradient. The formulation is applied to study the influence of anisotropy on the onset of localized deformation and to investigate the sensitivity of mechanical characteristics to the initial degree of saturation.