Abstract Induced seismicity is strongly related to various engineering projects that cause anthropogenic in-situ stress change at a great depth. Hence, there is a need to estimate and mitigate the associated risks. In the past, various simulation methods have been developed and applied to induced seismicity analysis, but there is still a fundamental difference between simulation results and field observations in terms of the spatial distribution of seismic events and its frequency. The present study aims to develop a method to simulate spatially distributed on-fault seismicity whilst reproducing a complex stress state in the fault zone. Hence, an equivalent continuum model is constructed, based on a discrete fracture network within a fault damage zone, by employing the crack tensor theory. A fault core is simulated at the center of the model as a discontinuous plane. Using the model, a heterogeneous stress state with stress anomalies in the fault zone is first simulated by applying tractions on the model outer boundaries. Subsequently, the effective normal stress on the fault plane is decreased in a stepwise manner to induce slip. The simulation result is validated in terms of the b-value and other seismic source parameters, hence demonstrating that the model can reproduce spatially and temporally distributed on-fault seismicity. Further analysis on the parameters shows the variation of frequency-magnitude distribution before the occurrence of large seismic events. This variation is found to be consistent with field observations, thus suggesting the potential use of this simulation method in evaluating the risk for seismic hazards in various engineering projects.