Prior to the 2018 season, Sports Illustrated ranked Altuve as the #2 player in baseball, trailing only Trout. On March 16, 2018, Altuve and the Astros agreed to a five-year, $151 million contract extension that would span the 2020–24 seasons. His current contract included a $6 million salary in 2018 and a $6.5 million team option in 2019. It was the largest contract in team history, and he became the sixth player to agree to a contract with an average annual value of $30 million per season or greater.
Altuve reached 1,000 games played in his career on April 17, 2018, versus the Seattle Mariners. He became the 20th player to appear in 1,000 games for the Astros. Over three games versus the Cleveland Indians spanning May 25–27, he realized a base hit in each of 10 consecutive at bats, breaking his own club record of eight which he had set the year prior. The streak included three doubles, one triple, and one home run.
On July 8, 2018, Altuve was selected as the starting second baseman for the American League in the All-Star Game, collecting the most votes of any player with 4,849,630 votes. It was his 6th All-Star selection overall and his 5th consecutive appearance and 4th straight start. On July 29, Altuve was placed on the disabled list for the first time in his MLB career due to right knee discomfort. Plagued with a right knee injury, the Astros announced that Altuve would serve as the designated hitter for the remainder of the season. In 137 games, Altuve finished with a .316 average, 13 home runs, and 61 RBI.
With the Astros finishing the year 103-59, the team clinched the AL West again, sweeping the Cleveland Indians in 3 games before eventually falling to the Red Sox in the ALCS. On October 19, 2018, Altuve officially underwent surgery to repair a patella avulsion fracture in his right knee. On November 8, Altuve was awarded his fifth career Silver Slugger Award and his fifth consecutive award. Having won his fifth award at second base, it tied him with Robinson Canó for most awards for an American League second baseman and second most all-time behind Ryne Sandberg.