Hydrogen embrittlement is shown to proceed through a previously unidentified mechanism. Upon ingress to the microstructure, hydrogen promotes the formation of low-energy dislocation nanostructures. These are characterized by cell patterns whose misorientation increases with strain, which concomitantly attracts further hydrogen up to a critical amount inducing failure. The appearance of the failure zone resembles the "fish eye"associated to inclusions as stress concentrators, a commonly accepted cause for failure. It is shown that the actual crack initiation is the dislocation nanostructure and its associated strain partitioning.