The extensive and well-documented concerns regarding environmental dispersion of toxic trace metals constitute solid motives for a special focus of their fate and forms in fuel treatment and conversion processes. The potential enrichment of trace elements during fuel pellet production processes and behavior during combustion was, therefore, studied in a combined field sampling and chemical equilibrium modeling work. Raw materials, pellet fuels, and particulate matter in the drying gases in two different pelletizing plants were sampled and analyzed. In addition, chemical equilibrium model calculations were performed with variations in the content of trace elements, moisture, sulfur, and chlorine, at both oxidizing and reducing conditions. A significant enrichment of Zn, Cu, Cd, and Pb was documented when using bark combustion gases for direct drying of the sawdust and was also supported by the chemical equilibrium results. This is presumably caused by the volatilization of these elements from the bark fuel during combustion, subsequently forming fine particles in the flue gases and being captured by the sawdust during drying. The magnitude and importance for these trace elements were, however, found to be relatively small, regarding concentrations in different fuels as well as potential increased emissions to air during combustion compared to national total emission estimations. In addition, some alternative measures for prevention of trace metal contamination during fuel pellet production were suggested, including fuel quality aspects, high-temperature particle separation, and indirect drying processes.