Soil sensitivity has previously been recognised as a significant contributor to soil failures both internationally and within New Zealand, particularly in the Tauranga region. Sensitive soils are characterised by initial high peak shear strength, yet very low remoulded shear strength. While international sensitive soils have been well characterised, the nature of sensitivity in rhyolitic deposits in New Zealand is poorly understood. This study characterises both sensitive and non-sensitive rhyolitic tephra derived soil samples from the Tauranga region in order to identify the fundamental differences in the materials between states of peak and remoulded strength. Field and laboratory investigations were undertaken to analyse sensitivity. Field investigations included shear vane testing for the quantification of sensitivity, and stratigraphic profiling. Laboratory testing comprised geotechnical testing (particularly shear strength and Atterberg limits), petrographic observations through scanning electron microscopy (SEM) and X-ray diffraction (XRD), and measurement of the rheology of remoulded sensitive materials. Five localities were used in this study. Three sites were considered sensitive (Omokoroa, Te Puna and Pahoia Peninsula), while the remaining two (Rangataua Bay and Tauriko) were considered non-sensitive on the basis of the Milne et al. (Milne, J.D.G.; Clayden, B.; Singleton, P.L.; Wilson, A.D. 1995: Soil description handbook. Manaaki Whenua Press, Lincoln, Canterbury) sensitivity test. Field observations showed sensitive material is of tephric origin, likely associated with the Te Puna Ignimbrite (~ 0.93 Ma). The deposits considered generally classify as sensitive to extra sensitive (7-15) with no samples being identified as quick. The non-sensitive material has characteristically different field behaviour where the material does not release moisture, or flow, upon remoulding. The non-sensitive material is associated with the Te Ranga Ignimbrite (~ 0.27 Ma). Moisture contents are typically high for the sensitive materials, always exceeding their respective liquid limits (liquidity indices > 1), while the opposite is true for the non-sensitive samples. Porosity is also high for the sensitive materials (> 61 %), whereas non-sensitive materials return lower porosity values of < 60 %. Characterising the peak strength state of the sensitive materials, triaxial testing show consistent effective cohesion and friction angles ranging between 8–16 kPa and 28–41 ⁰, respectively. Viscometric flow characteristics indicate that pH adjustment has a critical impact on remoulded sensitive material: typically as the pH becomes more alkaline, clay particle association is reduced and the soil weakens further, while with increased acidity there is a small increase in yield stress. XRD indicates that all materials are dominated by halloysite. The wet to saturated rhyolitic materials promote a silica-rich environment that is slow draining, leading to favourable conditions for halloysite formation over other clay minerals. Most commonly, halloysite was observed in sphere, tube and to a lesser extent, plate morphologies. SEM, XRD and EDX analyses revealed previously undocumented, large (~ 60 µm–~ 1.5 mm) halloysite books in selected sensitive materials. The books are hypothesised to have formed from the incorporation of iron into the halloysite unit cell to form plate morphologies, followed by Ostwald ripening under conditions of low iron in the soil solution, and coalescence during a relatively dry period to form the large books. The soil microstructure of the sensitive materials in comparison with the non-sensitive soils appears to provide the critical distinction in determining the variation between the peak to remoulded strength characteristics for the sensitive material. The sensitive material is comprised of similar sized small spheres and short, stubby tubular halloysite morphologies. These pack inefficiently, producing a low density of packing. Such an arrangement produces many small micropores which facilitate the development of high moisture contents, producing liquidity indices > 1. The primary microstructure is matrix-skeletal for sensitive samples. The non-sensitive samples are comprised of large spheres and long, thin tubular halloysite morphologies. These particles pack much more efficiently, where the tubes fill the voids produced between large spherical formations. The result is a much tighter structural arrangement in the clay fraction, with reduced potential for high moisture contents to build up, leading to liquidity indices < 1. The non-sensitive material typically displays a matrix microstructure. Upon remoulding, the structure of the sensitive material was broken down and appeared continuous. Connectors were typically destroyed, while tubes, plates and books were broken into smaller remnants. The similar sized spherical and tubular particles appeared to be easily mobilised following disturbance where they would fail in a fluidised manner from the high moisture held within the sample. The non-sensitive material, however, indicated very little change upon remoulding. The clay particle interactions were still arranged in a tight structure, which did not breakdown sufficiently to become entrained within the available moisture. The sensitivity of rhyolitic tephra, therefore, is primarily attributed to the relative size and packing of the halloysite particle morphologies. The low density of packing produced an open structure, allowing for high moisture contents to develop, which following remoulding, leads to irreversible structural breakdown and release of stored water, promoting flow characteristics of the soil and thus high sensitivity.