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Abstract The role of upper‐plate faulting in the seismic cycle of large megathrust earthquakes remains poorly understood. We use quasi‐dynamic numerical simulations of seismic cycles to analyze the interaction between crustal faulting and the foreshock sequence of the 2014 Iquique (Mw 8.2) earthquake in Northern Chile. Multi‐cycle models incorporating upper‐plate faulting align better with coseismic displacements, replicating events akin to the Iquique earthquake. Upper‐plate faulting significantly influences foreshock seismicity and deformation patterns. By calibrating the average hydraulic state—varying the effective normal stress—along the megathrust with pre‐earthquake seismicity, we find that lower pore pressure ratios result in more seismicity before the mainshock. This implies that the hydraulic state of the megathrust is critical for foreshock activity. This comprehensive modeling approach underscores the importance of the mechanical interplay between the megathrust and upper‐plate faults in precursory sequences of large subduction zone earthquakes.