The particle size effect on torrefaction of pine particles and formation of torrefied pellets has been studied in a thermogravimetric analyzer (TGA) and a tubular fixed bed reactor. The fixed bed reactor was also used to produce torrefied samples for a single-die press unit for the densification test. Both the TGA and fixed bed reactor torrefaction test results showed that the torrefaction rate was affected by the particle size, especially at high temperatures. Although the temperature gradient inside particles smaller than I mm is very small during torrefaction, the internal diffusion of generated vapors inside particles imposes an impact on the global torrefaction reaction rate. The hard core or nonshrinkage particle model with a first order torrefaction reaction can predict the reaction data reasonably well, with the data-fitted effective vapor diffusivity coefficient. The densification tests showed that more energy was required to make pellets from larger torrefied particles, while the water uptake and Meyer hardness tests of pellets revealed that good quality torrefied pellets could be obtained from fine torrefied sawdust particles.