Capillary barriers have increased in use for protecting sensitive underground regions from downward infiltration. However, questions and uncertainties remain about conceptualization and parameterization of capillary barriers for design and numerical modeling. In order to identify and to parameterize the relevant flow processes in this fine-over-coarse soil layer system, large-scale laboratory experiments were performed. The data revealed that water is predominately diverted laterally in a saturated fringe within the fine layer. Percolation through the system was found to be quite complex. At low infiltration rates, small quantities of water seeped uniformly through the system. At higher fluxes the seepage pattern changed to a more irregular distribution because of the occurrence of preferential flow. Numerical investigations based on the laboratory results demonstrated an extreme sensitivity of the system performance to the hydraulic functions of both layers.