ABSTRACTThe nature of the percolation process in granular metals is examined for the first time by a computer simulation of a system of metallic grains embedded in an insulating matrix. Assuming that the intergrain conduction is due to quantum mechanical tunneling it is found that a percolation-like critical behavior of the conductivity is obtained, but that a percolation universal behavior will be found only in a very special case. In contrast, the behavior of the electrical noise does not deviate substantially from the universal one. Comparison of these results with recent experimental observations suggests that in the metallic range, both transport properties are controlled by the continuous metallic network rather than by intergrain tunnelin.. We propose that the metallic network resembles the previously studied system of ‘inverted random voids’.