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An extensive amount of natural gas trapped in the subsurface is found as methane hydrate. A fundamental understanding of natural hydrate-bearing sediments is required to engineer production strategies and to assess the risks hydrates pose to global climate change and large-scale seafloor destabilization. This thesis reports fundamental studies on hydrate nucleation, morphology and the evolution of unsaturation during dissociation, followed by additional studies on sampling and pressure core testing. Hydrate nucleation is favored on mineral surfaces and it is often triggered by mechanical vibration. Continued hydrate crystal growth within sediments is governed by capillary and skeletal forces; hence, the characteristic particle size d10 and the sediment burial depth determine hydrate morphologies in natural sediments. In aged hydrate-bearing sand, Ostwald ripening leads to patchy hydrate formation; the stiffness approaches to the lower bound at low hydrate saturation and the upper bound at high hydrate saturation. Hydrate saturation and pore habit alter the pore size variability and interconnectivity, and change the water retention curve in hydrate-bearing sediments. The physical properties of hydrate-bearing sediments are determined by the state of stress, porosity, and hydrate saturation. Furthermore, hydrate stability requires sampling, handling, and testing under in situ pressure, temperature, and stress conditions. Therefore, the laboratory characterization of natural hydrate-bearing sediments faces inherent sampling disturbances caused by changes in stress and strain as well as transient pressure and temperature changes that affect hydrate stability. While pressure core technology offers unprecedented opportunities for the study of hydrate-bearing sediments, careful data interpretation must recognize its inherent limitations.