This review article deals with various aspects of the extrusion–spheronization technique. The first part includes different steps in the production process of pellets such as granulation, extrusion, spheronization, and drying. In the second part, the parameters which can influence the quality of pellets including formulation (moisture content, granulating liquid, excipients, and drugs), equipment (mixer, extruder, friction plate, and extrusion screen) and process (extrusion speed, extrusion temperature, spheronizer load, spheronization time, spheronization speed, and drying method) are discussed. In the final part, methods available for characterization (particle size distribution, surface area, shape and sphericity, porosity, density, hardness and friability, flow properties, disintegration, and dissolution) of the pellets are explained.