Gas hydrates are crystalline compounds made of gas and water molecules. Methane hydrates are found in marine sediments and permafrost regions; extensive amounts of methane are trapped in the form of hydrates. The unique behavior of hydrate-bearing sediments requires the development of special research tools, including new numerical algorithms (tube- and pore-network models) and experimental devices (high pressure chambers and micromodels). Hydraulic conductivity decreases with increasing variance in pore size distribution; while spatial correlation in pore size reduces this trend, both variability and spatial correlation promote flow focusing. Invading gas forms a percolating path while nucleating gas forms isolated gas bubbles; as a result, relative gas conductivity is lower for gas nucleation than for gas invasion processes, and constitutive models must be properly adapted for reservoir simulations. Physical properties such as gas solubility, salinity, pore size, and mixed gas conditions affect hydrate formation and dissociation; implications include oscillatory transient hydrate formation, dissolution within the hydrate stability field, initial hydrate lens formation, and phase boundary changes in real field situations. High initial hydrate saturation and high depressurization favor gas recovery efficiency during gas production from hydrate-bearing sediments. Even a small fraction of fines in otherwise clean sand sediments can cause fines migration and concentration, vuggy structure formation, and gas-driven fracture formation during gas production by depressurization.