The interaction between volcanic activity and flank instability during the Christmas Eve eruption at Mount Etna in 2018 is explored, using a mechanically consistent inverse model fitting high spatial resolution SAR data. Inversions search for fractures that may be curved and can accommodate co‐eval pressure and shear stress changes. Displacements associated with the eruption result from the interaction between two intrusion sources: a buried dyke and a curved sheared intrusion that fed the eruption. Moreover, we identify that the sheared magmatic intrusion induced the observed eastward slip on the Pernicana fault, while the Fiandaca fault was undergoing stress accumulation, which was suddenly released during a M5.0 seismic event. The Fiandaca fault is determined to be listric, rooting beneath the mobile eastern flank of the volcano. This study highlights the role of curved fractures, acting as sheared intrusions or as faults, in volcanoes exhibiting flank instabilities.