The use of small-scale, instrumented laboratory columns for the study of moisture content and electrical conductivity response of soils has historically been restricted primarily to fine-grained materials because of the size of available instrumentation and probe installation difficulties. This study explores the suitability of capacitance-type dielectric sensors for studies of coarse-grained granular materials by assessing installation and calibration requirements. A number of different methods for installing a Hydra Probe dielectric sensor in a gravelly granular material were assessed and their repeatability compared with sensor installation in a fine-grained material. Typical installation methods were found to result in highly inconsistent installation in the compacted granular material, with poor repeatability. An alternative installation method is presented for gravelly granular materials, which resulted in an acceptable level of repeatability for both components of sensor measurement, consistent with that achieved by direct sensor insertion in fine-grained materials. It was also found necessary to develop a material-specific volumetric moisture content calibration relationship for the granular material as the manufacturer-supplied relationships were found to have very-low accuracy. This material-specific calibration was found to improve the accuracy of the dielectric sensor to ±0.03 m3/m3. To demonstrate the potential of dielectric sensors for use in the study of compacted granular materials, two laboratory experiments are described: one monitoring changes in moisture content with time and the other changes in electrical conductivity. General recommendations for use of dielectric sensors with granular materials are also presented.