Cratons record the early history of continental lithosphere formation, yet how they became the most enduring part of the lithosphere on Earth remains unknown1. Here we propose a mechanism for the formation of large volumes of melt-depleted cratonic lithospheric mantle (CLM) and its evolution to stable cratons. Numerical models show large decompression melting of a hot, early Earth mantle beneath a stretching lithosphere, where melt extraction leaves large volumes of depleted mantle at depth. The dehydrated, stiffer mantle resists further deformation, forcing strain migration and cooling, thereby assimilating depleted mantle into the lithosphere. The negative feedback between strain localization and stiffening sustains long-term diffused extension and emplacement of large amounts of depleted CLM. The formation of CLM at low pressure and its deeper re-equilibration reproduces the evolution of Archaean lithosphere constrained by depth–temperature conditions1,2, whereas large degrees of depletion3,4 and melt volumes5 in Archaean cratons are best matched by models with lower lithospheric strength. Under these conditions, which are otherwise viable for plate tectonics6,7, thermochemical differentiation effectively prevents yielding and formation of margins: rifting and lithosphere subduction are short lived and embedded in the cooling CLM as relict structures, reproducing the recycling and reworking environments that are found in Archaean cratons8,9. Although they undergo major melting and extensive recycling during an early stage lasting approximately 500 million years, the modelled lithospheres progressively differentiate and stabilize, and then recycling and reworking become episodic. Early major melting and recycling events explain the production and loss of primordial Hadean lithosphere and crust10, whereas later stabilization and episodic reworking provides a context for the creation of continental cratons in the Archaean era4,8.