Fluidised hot melt granulation (FHMG) is a novel technology for granulation process in pharmaceutical industry, which has distinct advantages over other commercial techniques. The aim of this research was to investigate granulation and the effect of process parameters that may affect FHMG process. In this work, ballotini beads were used as the model particles and Lutrol (R) F 68 Poloxamer 188 was used as meltable solid binder. In order to determine the granulation and nucleation mechanism in this co-melt FHMG system, several parameters were investigated, such as binder content, particle size of binder and particle size and hydrophobicity of ballotini. These parameters were correlated to granule size distribution, mean granule size and granule shape. Furthermore, these experimental investigations were designed so that the coalescence model could be applied to the co-melt FHMG system. The analysis indicated that the non-inertial regime extends over a relatively short time period of <60s, however this accounts for the majority of the particle size increase in the entire process. A decrease in the extent of granulation was induced by increasing the hydrophobicity of the ballotini, which was ascribed to a decrease in capillary pressure of the system. (C) 2008 Elsevier B.V. All rights reserved.