Introduction Although the oil industry has been aware of the directional variability of permeability in porous rock, the directional variability of relative permeability has been largely ignored. Yet it is apparent that such an effect must be present in a system in which the distribution of oil and gas within the porous matrix is controlled by capillary forces. It is easy to visualize a rock composed of layers of fine and coarse material such that gas flow across the bedding planes would take place only after the average oil saturation had been reduced to a very low value. The fine layers, because of their greater capillarity, would remain saturated and act as barriers to the flow of gas after the coarse layers had been desaturated. Flow of gas parallel to the bedding planes would obviously take place at a much greater liquid saturation. Without more complete information concerning the geology of a reservoir than is generally available, it is not possible to predict exactly how such phenomena would affect the over-all performance of an oil field. It is possible, however, to predict qualitatively the effect of stratification on relative permeability measurements made on laboratory cores. In this investigation the effect of stratification was studied analytically by assuming that two porous materials with different capillary pressure-desaturation curves (but identical relative permeability curves) were in contact and in capillary equilibrium. As a qualitative check on the analytical results, cores having various degrees of visible stratification were used for relative permeability measurements made with fluids flowing both parallel and perpendicular to the bedding planes. A quantitative check was considered impractical because of the difficulty of devising models in which two materials of predetermined properties could be joined without the plane of contact becoming a discontinuity. Theoretical Considerations and Assumptions The assumption of capillary equilibrium in an oil-gas system implies that the difference in pressure between oil and gas is everywhere the same.