The aim of the study was to investigate melt granulation in a laboratory scale fluid-bed granulator with respect to granule growth, granule properties and resulting tablet properties. The parameters investigated were method of addition of PEG (spray-on or addition as flakes), binder concentration, PEG type (3000, 4000 and 6000, sprayed-on), size (PEG 4000, added as three different sized flakes), powder type (two different sized lactose types and corn starch) and operating conditions (volume air flow and heating temperature). Addition of binder as flakes led to layering as a growth mechanism when the size of the flakes was high. Coalescence occurred when the size was low. Coalescence also occurred when spraying was the method of addition. Due to the greater viscosity of the PEG 6000 melt it produced bigger granules than 3000 or 4000. The influence of volume air flow was moderate and the influence of heating temperature in the range of 70-90 degrees C was very low with both methods of addition. The disintegration time of tablets from granules where PEG was added as flakes was shorter than from granules where PEG was sprayed-on. The latter method of binder addition led to tablets which did not disintegrate but eroded. This was apparently caused by formation of a binder matrix, which could not be destroyed by the disintegrant.