The question of whether or not soil hydraulic parameters of dual-permeability models (DPM) can be properly identified by inverse analysis of preferential water flow data has not been resolved to date. We applied a DPM based on two coupled Richards' equations to compare the performance of inverse and forward simulations of laboratory preferential flow data. Infiltration and drainage experiments were conducted using a repacked loam soil column (80 cm long, 24-cm diameter) containing a cylindrical sand region (2.4-cm diameter) as the preferential flow path (PFP) along its central axis. The forward DPM water flow simulations relied on hydraulic parameters for the matrix and the PFP as determined by means of separate infiltration and drainage experiments on loam and sand columns, respectively. One inverse DPM approach relied on standard (lumped) observations of infiltration and outflow, while the other included outflow through the matrix and the PFP. Both inverse approaches provided accurate matches of bulk infiltration and outflow, but the outflow out of the matrix and the PFP could only be described when fitting the DPM to region-specific outflow data. The practical implication of this finding for predicting solute transport in natural soils was evaluated. An observed tile-drainage hydrograph was used for inverse hydraulic DPM parameter estimation, followed by fitting the solute transfer coefficient and the dispersivity for simulating Br− tracer concentrations. This sequential fitting procedure was successful for hydrograph simulation but unsuccessful for Br− breakthrough simulation. Simultaneous hydraulic and transport parameter estimation considerably improved the approximation of Br− concentrations. This study shows that a hydrograph alone is not sufficient for inverse identification of soil hydraulic DPM parameters. Simultaneously employing hydrograph and solute breakthrough data may facilitate identification of hydraulic and transport DPM parameters to characterize preferential flow and solute transport.