An extrusion-based encapsulation process has been developed for making salt grain-sized iron premix for salt fortification. The first step of extrusion agglomeration process has been studied and reported previously. The focus of this study is on the optimisation of the colour-masking and polymer coating steps. Several colour-masking techniques and polymer encapsulants were investigated at various encapsulation levels. Salt samples prepared by blending the resulting iron premixes with iodised salt retained more than 90% of the original iodine and more than 93% of the ferrous iron after 3 months storage at 35 degrees C and 60% relative humidity (RH). Hydrophilic coatings such as hydroxypropyl methyl cellulose (HPMC) offered more protection at the 10% encapsulation level compared to other coating materials studied. All iron premix formulations exhibited high particle density, good bioavailability and acceptable organoleptic properties. The process using the most effective formulations and optimised operation parameters is ready for pilot scale testing and field studies.