When a granular material such as soil interacts with a hard artificial structure, it commonly involves a considerable degree of material heterogeneity. The shear deformation largely localizes into a narrow band: the shear band. The mechanism of the shear band formation at the soil–structural interface is of significant interest to researchers and engineers, for it explains the process of soil failure under interface shearing as well as the physical essence of the soil behaviors associated with such failure – for example, stress peak, stress softening, and dilatancy. In this paper, we employ the discrete element method (DEM) to analyze the formation of the shear band in a series of 2D interface shear tests in which specimens are initialized with different void ratios. During the interface shearing process, we analyze the shear velocity field v_x and its gradient field, both of which are extracted on the basis of kinematic quantities given by grains. In the dense specimen, imperfections – indicated by the discontinuities in the field of v_x and  – are observed appearing in the stress hardening regime. These imperfections progressively accumulate and converge with each other, threatening to form several potential failure bands. This continues until the stress peak, after which a major failure band appears to be dominant over others. The shear band is then shaped, and the stress softening occurs. In the loose specimen subjected to interface shearing, the domain of the strain localization is so unstable and varied that a steady shear band cannot be steadily formed. In both samples, stress variations are shown to be highly dependent on degree of strain localization.