Continental mid‐lithosphere discontinuity (MLD) seems to be ubiquitous beneath cratons around the world with the dominant depth of 70–100 km, and is characterized by a shear‐wave velocity drop of 2%–7%, according to geophysical observations. The MLD is often considered to be related to a rheologically weak layer; however, the mechanism of MLD formation is widely debated. In this study, we have conducted systematic numerical modeling with a new and simplified deep hydration method to study the dynamics of craton evolution and MLD formation. The results indicate that the MLD may be induced by slow hydration processes within the mantle lithosphere during craton evolution. The top boundary of this hydrated layer is characterized by high water content and low shear‐wave velocities, and is consistent with the depth and properties of natural MLD observations. Thus, we propose that the MLD may act as a water collector during craton evolution. Plain Language Summary A craton is an ancient continental lithosphere, which is generally considered to be rheologically strong and thus capable of surviving the long‐term evolution with rigorous mantle convections and plate tectonic processes. However, the cratonic lithosphere may not be homogenous and “rigid,” but has some internal weak layers. According to the recent geophysical investigations, a seismic discontinuity is widely observed in the thick cratonic lithosphere and defined as mid‐lithosphere discontinuity (MLD). What is the nature of the MLD and how did it form within the stable cratonic lithosphere? This question inspires wide debates, but is still controversial. In this study, we have conducted systematic numerical modeling with a new and simplified deep hydration method to study the dynamics of craton evolution and MLD formation. The results indicate that the MLD may represent a high water content layer within the cratonic lithosphere. This layer might be hydrated by the upwelling aqueous fluid, which could be released during the dehydration processes including plate subduction and mantle plume in the deep mantle. Thus, the MLD may act as a water collector during the long‐term craton evolution. Key Points The dynamics of craton evolution and mid‐lithosphere discontinuity (MLD) formation is investigated by numerical models with a new and simplified deep hydration method The MLD may be induced by slow hydration within the mantle lithosphere and acts as a water collector during long‐term craton evolution The MLD represents the top boundary of a hydrated layer with high water content and low shear‐wave velocity within cratonic lithosphere