The quality of compaction of unbound aggregate materials with permeable gradation plays a vital role in their field performance; however, there are currently few unanimously accepted techniques or quality control criteria available for ensuring adequate compaction of such materials in either laboratory or field applications. This paper presented testing results of a laboratory gyratory compaction study where the combinations of gyratory parameters were properly designed using the orthogonal array theory. Innovative real-time particle motion sensors were employed to record particle movement characteristics during the compaction process and provide a meso-scale explanation about compaction mechanisms. Particle abrasion and breakage were also quantified from particle shape digitized from the three-dimensional (3D) laser scanner before and after compaction. The optimal combination of gyratory parameters that yields the best compaction performance was determined from the orthogonal testing results with the relative importance of major influencing parameters ranked accordingly. Meso-scale particle movement at the upper center and center side positions of the specimen are promising indicators of compaction quality. The gyratory compaction process can be consistently divided into three distinct stages according to both macro-scale performance indicators and meso-scale particle movement characteristics. A statistically significant bi-linear relationship was found to exist between relative breakage index and maximum abrasion depth, whereas the quality of compaction and the extent of particle breakage appear to be positively correlated, thus necessitating the cost-effective balance between them. The results of this study could provide technical insights and guidance to field compaction of unbound permeable aggregates.