Microbially induced desaturation (MID) via denitrification is an emerging ground improvement technique to mitigate liquefaction by stimulating the metabolic processes of native bacteria to produce biogas, biominerals and biomass. The production of biogenic gas gradually lowers the degree of saturation of treated soils, thereby dampening the pore pressure response to cyclic loading. However, the production of these metabolic products also alters the hydraulic and mechanical properties of the soil. A series of four tank tests simulating two-dimensional plane strain conditions were performed to evaluate the effectiveness of MID and the resulting changes to the hydraulic properties of the soils. Previous studies have demonstrated the mechanical response for treated homogenous granular soils at the bench scale via vertical injection methods. However, limited knowledge is available on the impact of partial desaturation on the hydraulic properties of the soil, particularly in stratified formations. Treating larger granular soil specimens via lateral injection methods is important for the up-scaling and future commercialization of the process as it may affect injection strategies, and the distribution of substrates and metabolic products. Tank tests were performed on a layered natural soil sediment collected from Richmond, British Columbia, Canada, as well as layered and unlayered laboratory grade Ottawa sands of different grain size distributions. The results demonstrated the effectiveness of treatment upon macro-scale soil properties, and showed how gas formation, migration and entrapment, and resulting degree of desaturation and hydraulic conductivity are affected by micro and macro-stratifications in granular soils.