Permeability in fractured carbonate reservoirs is very heterogeneous due to fracturing at different scales superimposed on inherent textures from deposition and diagenesis. Observations of fractures in core and outcrop indicate that flow in open fractures in carbonate rock tends to be channelled rather than through fissures. Most of the flow takes place along a few dominating channels in the fracture plane, whereas most of the fracture plane is not effective for fluid flow. The formation of flow channels is caused by a combination of mechanical and, in particular, diagenetic processes. Single extension fractures occur as partly open or vuggy fractures, and their hydraulic properties are controlled by dissolution and cementation. Single shear fractures are typically open at local steps in the fault plane controlled by shearing along irregular fracture surfaces. Fault damage zones tend to be concentrated at fault tips, intersections, pull-aparts and overlap zones that represent areas of dilation. These damage zones represent elongated features in three dimensions with a high fracture density that will result in channelled flow at reservoir scales. The effect of channelled flow should be taken into account during evaluation of fractured carbonate reservoirs and when building dynamic flow models.