Nacre, the iridescent material in seashells, is one of many natural materials employing hierarchical structures to achieve high strength and toughness from relatively weak constituents. Incorporating these structures into composites is appealing as conventional engineering materials often sacrifice strength to improve toughness. Researchers hypothesize that nacre's toughness originates within its brick-and-mortar-like microstructure. Under loading, bricks slide relative to each other, propagating inelastic deformation over millimeter length scales. This leads to orders-of-magnitude increase in toughness. Here, we use in situ atomic force microscopy fracture experiments and digital image correlation to quantitatively prove that brick morphology (waviness) leads to transverse dilation and subsequent interfacial hardening during sliding, a previously hypothesized dominant toughening mechanism in nacre. By replicating this mechanism in a scaled-up model synthetic material, we find that it indeed leads to major improvements in energy dissipation. Ultimately, lessons from this investigation may be key to realizing the immense potential of widely pursued nanocomposites.