Multiphase flow processes in fractured rocks are of major importance for the remediation of subsurface contamination, for engineering petroleum reservoirs, and for the safety analysis of nuclear waste repositories. We developed procedures for determining the water retention curve, gas permeability function, and pore structure of undisturbed fracture-zone samples with cohesionless fault gouge layers in the laboratory. Mylonitic samples were taken at Grimsel Test Site (Switzerland). Intrinsic permeabilities of the fault gouge layers were 5 orders of magnitude higher, and significant desaturation occurred at capillary pressure heads about 10 times lower than in the surrounding granodiorite, thus showing that at this site gas flow would take place mainly in the fracture zone. The measured water retention and gas permeability data were well represented by parametric models designed for porous media. Gas flow could only be detected at water saturations below about 0.8, thus showing strong phase interference at high water saturations. To relate these findings to the pore structure of the samples, a qualitative and quantitative description of the pore space was obtained at different scales using fluorescent resin imbibition and image analysis techniques. Results show that the fracture zone consists of a continuous and interconnected fracture network that is filled with a porous medium-like material, thus explaining the applicability of the above mentioned models and the rather strong phase interference. ¿ 1998 American Geophysical Union