The effects of an externally applied plasticizer on compaction behavior and green microstructure quality of spray-dried powders was investigated. The plasticizer was applied to the external surfaces of already spray-dried powders by spraying it on tumbling spray-dried granules. The apparent yield point of the spray-dried powder was reduced when the plasticizer was added. Microstructures of compacts made from these granules (,with and without the externally applied plasticizer) were compared at different compaction pressures. Better knitting across granule interfaces and fewer defects were obtained for the granules with the externally applied plasticizer.