Nakhlite meteorites are ~1.4 to 1.3 Ga old igneous rocks, aqueously altered on Mars ~630 Ma ago. We test the theory that water-rock interaction was impact driven. Electron backscatter diffraction demonstrates that the meteorites Miller Range 03346 and Lafayette were heterogeneously deformed, leading to localized regions of brecciation, plastic deformation, and mechanical twinning of augite. Numerical modeling shows that the pattern of deformation is consistent with shock-generated compressive and tensile stresses. Mesostasis within shocked areas was aqueously altered to phyllosilicates, carbonates, and oxides, suggesting a genetic link between the two processes. We propose that an impact ~630 Ma ago simultaneously deformed the nakhlite parent rocks and generated liquid water by melting of permafrost. Ensuing water-rock interaction focused on shocked mesostasis with a high density of reactive sites. The nakhlite source location must have two spatially correlated craters, one ~630 Ma old and another, ejecting the meteorites, ~11 Ma ago.