The accurate flow measurement of each individual phase is important in unsaturated flow through rock joints, where both air and water phases flow together. An increase in the quantity of one fluid phase decreases the relative permeability of the other phase. The relative permeability is important in numerical models to analyze the risk of ground-water inundation and uncontrollable gas flows in underground excavations in jointed rock. A new apparatus, the High Pressure Two-Phase Triaxial Apparatus (HPTPTA), has been designed for examining the strength and coefficient of permeability characteristics of fractured and intact rocks under two-phase flows. In single-phase triaxial equipment, the rock specimen is subjected to a single fluid flow (either water, oil, or gas) through the fractures. In the HPTPTA, two fluids (e.g., water 1 air, water 1 oil, and oil 1 air) can be forced to flow through the specimen, and the flow rates of the fluids can be measured independently. The scope of tests that can be carried out in this apparatus is wide, including the evaluation of (1) stress-strain behavior subject to internal fluid flow; (2) relative permeability of each fluid phase under different degrees of saturation; and (3) the associated volume change of the specimen. In this paper, the design concepts of the HPTPTA and the results based on the testing of fractured rock specimens are discussed. The laboratory results are compared to a simplified mathematical model developed by the writers. Based on the laboratory results, it is shown that the well-known Darcy’s law can be modified for estimating the two-phase flow rates using the relative permeability concept.