The bentonite pellet-contained material (PCM) is a feasible material for the joint sealing of high-level radioactive waste repository. During the operation of the repository, the PCM will be unsaturated for a long time, and its water retention and permeability directly affect the buffer barrier seepage, nuclide migration, and joint healing. Moreover, the particle size of bentonite pellets and dry density are important factors affecting the performance of PCM. In this work, the pressure plate method and vapour equilibrium technique were utilized to test the soil-water characteristic curves (SWCCs) of the PCMs with different particle sizes and dry densities. The unsaturated hydraulic conductivity of the PCMs was predicted by combining the SWCC model and saturated hydraulic conductivity. The results showed that in the low suction range (20–1150 kPa), the dry density and particle size had a negative correlation with the water content at the same suction. In the high suction range (4200–309000 kPa), the dry density and particle size had little effect on the SWCC. The Gardner model was appropriate for describing the SWCC of PCM. In addition, the hydraulic conductivity of the PCM decreased with the increase in dry density, while increased with the increase in particle size. The influence mechanism of the SWCC and hydraulic conductivity was further discussed based on the scanning electron microscopy images and pore size distribution curves.