The permeability of river beds is an important control on hyporheic flow and the movement of fine sediment and solutes into and out of the bed. However, relatively little is known about the effect of bed permeability on overlying near-bed flow dynamics, and thus on fluid advection at the sediment-water interface. This study provides the first quantification of this effect for water-worked gravel beds. Laboratory experiments in a recirculating flume revealed that flows over permeable beds exhibit fundamental differences compared with flows over impermeable beds of the same topography. The turbulence over permeable beds is less intense, more organised and more efficient at momentum transfer because eddies are more coherent. Furthermore, turbulent kinetic energy is lower, meaning that less energy is extracted from the mean flow by this turbulence. Consequently, the double-averaged velocity is higher and the bulk flow resistance is lower over permeable beds, and there is a difference in how momentum is conveyed from the overlying flow to the bed surface. The main implications of these results are three-fold. First, local pressure gradients, and therefore rates of material transport, across the sediment-water interface are likely to differ between impermeable and permeable beds. Second, near-bed and hyporheic flows are unlikely to be adequately predicted by numerical models that represent the bed as an impermeable boundary. Third, more sophisticated flow resistance models are required for coarse-grained rivers that consider not only the bed surface but also the underlying permeable structure. Overall, our results suggest that the effects of bed permeability have critical implications for hyporheic exchange, fluvial sediment dynamics and benthic habitat availability.