The use of pulverized coal for power generation results in the production of vast amounts of fly ash in the United States. This research is concerned with the role of the physicochemical characteristics of fly ash in governing its pelletization and the strength of the product pellets in relation to their potential use as lightweight aggregate. The potential impact of the research is extremely great in that a severe environmental problem may be alleviated by converting a huge mineral waste into a resource. Although results on batch and locked-cycle pelletization tests have indicated that it is possible to produce pellets of adequate strength from fly ash, appropriate and precise control of operation conditions is vital. Particle packing characteristics and the pozzolanic nature of ash have been identified as the important factors controlling the pelletization moisture and pellet growth. Pellet strength properties were found to be related to the amount of active silica and lime in the ash, the curing conditions, and the final products of hydration reactions. A thorough understanding of the control of continuous pelletization circuits must be developed if products of uniform quality are to be produced.