This paper describes the relationship between the micro-structure and hydraulic conductivity of simulated sand-bentonite mixtures (SSBMs) prepared with powdered and granular bentonite. Glass beads were used to simulate sand grains because of their superior optical properties. The micro-structure of SSBMs was observed using optical micrography and scanning electron microscopy. For mixtures prepared with powdered bentonite, the indications are that bentonite coats the particles. As the bentonite content increases, the thickness of bentonite coating increases and reduces the area available for flow. For mixtures containing granular bentonite, the dry bentonite granules occupy the space between the particles and then swell to fill the void space. As the bentonite content increases, the number of granules increases, leading to more void spaces being filled with bentonite. At higher bentonite content (>8%), flow paths devoid of bentonite are unlikely, and the hydraulic conductivity appears to be controlled by the hydraulic conductivity of bentonite. The changes in micro-structure that were observed are consistent with the decrease in hydraulic conductivity that occurs with increasing bentonite content. However, the relationship between hydraulic conductivity and bentonite content differs depending on whether a mixture contains powdered or granular bentonite.