This paper focuses on characterization of the heat-transfer and water-flow processes in physical models of borehole heat exchanger arrays in unsaturated soil layers. The overall goal is to develop a data set that can be used to validate the coupled thermo-hydraulic flow models needed to simulate the efficiency of heat transfer in soil-borehole thermal energy storage systems. Two bench-scale physical models consisting of a triangular array of vertical heat exchangers within a layer of unsaturated silt were constructed in insulated cylindrical tanks to evaluate the impact of different boundary conditions on the heat-transfer and water-flow processes in the silt during heat injection into the array. In one model, the heat exchangers were placed at a radial location at 26% of the tank radius, while in the other model, the heat exchangers were placed on the inside of the tank wall. During circulation of heated fluid through the heat exchangers, the changes in soil temperature and volumetric water content along the centerline of the array at different depths were measured using dielectric sensors. The thermal conductivity and specific heat capacity of the silt were also monitored using a thermal probe at the center of the silt layer at midheight. Permanent drying was observed for the soil within the array with the smaller spacing, while an increase in water content was observed in the array with a spacing equal to the container diameter. An increase in thermal conductivity of the soil was observed within the array in the case of larger spacing, while the opposite was observed in the case of smaller spacing. The results indicate the possible formation of a convective cell within the larger array as water was driven inward from the heat exchangers. These results highlight the importance of coupled heat transfer and water flow in soil-borehole thermal energy storage systems in the vadose zone.