Quantifying the vertical permeability and sealing capability of the stylolite zones in a Middle East carbonate reservoir is critically important for the enhanced recovery, water coning, perforation policy and well-placement choices. A wireline formation tester was used to perform four vertical interference tests (VIT) in a newly drilled well. The objective was to obtain permeability, permeability anisotropy and vertical communication across the stylolite zones.The formation tester was configured with a straddle packer, acting as a source of fluid flow, and two observation probes that recorded the pressure disturbances originating from the source. The formation testers were strategically placed so that the stylolite zones were located between the two observation probes. The simultaneous analysis of pressure transients from the straddle packer and the first probe provided the permeability and the permeability anisotropy of the main reservoir units. The vertical communication across the stylolite zones was evaluated by analyzing the pressure transients from the second probe.The results of the four VITs indicate varying degrees of vertical permeability across the stylolite zones, implying none have the sealing capability for fluid flow. Reservoir simulation studies were performed to evaluate the impact of stylolite sealing capacity on field performance. Results show that the model cannot match the actual production and pressure data if the stylolite zones were sealing. Therefore, this confirms that the stylolite zones in this field have no sealing capacity as shown by the VIT test results.The result of this study concludes that VITs can provide valuable dynamic data for reservoir characterization and could be extended in a field-wide approach to evaluate the lateral continuity of the vertical permeability variation across the stylolite zones. The results will be used in determining the perforation and well-placement policy and modeling the enhanced oil recovery studies.