Cellulose fibers are rarely used for the extrusion of composites because of the problems in feeding them into the extruder and in dispersing them properly. Pelletization made it possible to feed cellulose fibers into extruder, but it reduced dramatically the fiber length. The goal of this study was to optimize the pelletization process for extrusion applications. Bleached sulfite cellulose fibers were pelletized at different moisture contents and with the optional addition of carboxymethyl cellulose (CMC). The pellets were subsequently extruded with polypropylene matrix without compatibilizer. Fiber dispersion and fiber breakage during extrusion were investigated. Pre-blending of polymer and fiber pellets and introduction of the fibers through a side extruder were compared. CMC acted as a processing aid during pelletization, resulting in lower fiber breakage but in compact and stiff pellets. Lower moisture content also increased the compactness of the pellets. The dispersability of the fibers during extrusion decreased with increased pellets' compactness. CMC created inter-fiber bonds, decreasing further the fibers' dispersability. The fiber length in the composites was the same regardless of the pelletization parameters. Early introduction of the fibers improved fiber dispersion. Feeding through side extruder was more stable and more reliable than pre-blending. (C) 2009 Wiley Periodicals, Inc. J Appl Polym Sci 115: 2794-2805, 2010