We describe a method for characterization of the microstructure of a paper, in terms of the statistical distribution of the effective radii and lengths of the channels between the paper's fibers, and the average coordination numbers that characterize the connectivity of such channels, both in the main planes of the paper and in the transverse direction perpendicular to these planes. The microstructure of the paper is then represented by a three-dimensional network of interconnected flow channels between the fibers. The geometrical characteristics of the channels, such as their effective radii and lengths, are selected from the statistical distributions obtained by the characterization method, as are the two average coordination numbers. Extensive computer simulations are carried out to compute the effective permeability tensor of the paper, and to investigate the effect of the various microstructural parameters on the tenser. These simulations indicate that the two average coordination numbers, as well as the spatial distribution of the fibers and their length, strongly influence the flow properties of a paper. (C) 2004 Elsevier Ltd. All rights reserved.