Shale contains a certain amount of natural fractures, which affects the mechanical properties of shale. In spite that significant progress has been made, how natural fractures interfere the failure behaviour of layered shale remains unclear and need to be examined. In this paper, a bonded-particle model in particle flow code (PFC) is established to simulate the failure process of layered shale under Brazilian tests, under the complex relationship of layer plane and natural fracture. First, a shale model without natural fractures is verified against the experimental results. Simultaneously, the impact of the layer plane angle (marked as α) on the failure process in intact shale is exposed. Then, a natural fracture is embedded in the shale model, where the outcomes indicate that α and the angle (marked as β) of embedded fracture prominently interfere the failure strength anisotropy and fracture pattern. Finally, sensitivity evaluations suggest that variable tensile/cohesion strength has a changeable influence on failure mechanism of shale, even for same α or/and β. To serve this work, the stimulated fractures are innovatively and concisely categorized into two patterns based on whether they relate to natural fracture or not. Meanwhile, four damage modes (matrix shear, matrix tension, layer shear and layer tension) and the number of micro cracks during the loading process are recognized quantitatively to study the mechanism of shale failure behaviour. Considering the failure mechanism determines the outcome of hydraulic fracturing in shale, this work is supposed to provide a significant implication in theory for the engineering operation.