Pellets are spherical or nearly spherical, free-flowing granules with a narrow size distribution, typically varying between 500 and 1500 µm for pharmaceutical applications. They are generally produced via a pelletization process whereby a powder blend consisting of an API and excipients particles is agglomerated into spherical granules. This review article deals with various aspects of the extrusion–spheronization technique. Pelletization is a technique to convert drugs or excipients to small free flowing, spherical or semi spherical units, which are produced by agglomerating fine powdered drugs/ excipients with a binder solution. Pellets range in size, typically, between 0.5 – 2 mm. In relation to pharmaceuticals, pellets offer high degree of flexibility in design and development of oral dosage form. Pelletization technique help in the formation of spherical beads or pellets having a diameter 0.5 -1.5 mm which can be eventually coated for preparation of modified release dosage form. The manufacturing techniques include Drug layering, Extrusion-Spheronization, Cryopelletization, Compression, Balling, Hot-Melt Extrusion Technology, Freeze pelletization, Spray-drying & Spray-congealing. Factors affecting pelletization technique and advantages, disadvantages of pellets are discussed.