Commercial development of natural gas hydrate, over 90% of which is found in fine-grained sediments world-wide, is of significance to energy structure, energy security, and global climate. One of the most critical physical parameters for hydrate exploitation is reservoir permeability, which directly affects the efficiency and economic feasibility of gas production. In this paper, hydrate morphologies and pore habits are identified in both natural cores and synthesized fine-grained specimens. Laboratory and field tests of permeability are summarized, and the dependence of permeability on various influencing factors is comprehensively discussed. Results show that the hydrate morphologies and pore habits are predominantly influenced by particle size, stress state, and geological conditions. They exist in the form of lenses, nodules, chunks, veins, and others within fine-grained sediments. The effective permeability is typically measured as larger than 1 millidarcy (mD) in laboratory tests, however, field tests have shown that it can range from 0.01 to 1 mD. There is a lack of effective permeability models that can be used in numerical simulations to predict gas production capacity. Furtherly, challenges to current research are analyzed and future research prospects are proposed. Developing new measurement techniques, bridging the gaps of different methods and scales, as well as establishing appropriate permeability models are needed for reservoir simulators to accurately predict gas production. Collaborative and comparative studies are needed to develop agreeable measurement methods and testing protocols to address the challenges of better understanding the permeability in hydrate-bearing fine-grained sediments.