The effect of the particle size of the filler material on liquid requirement and granule properties was studied using lactose as the filler material in a high shear mixer. Three different lactose grades were granulated in an instrumented high shear mixer. The effect of amount of binder solution on the granulation process and granule properties was also examined. The granules were evaluated for granule moisture, mean granule size and distribution, fines and lumps, bulk and tap density, Hausner ratio, flowability and friability. The results show that, during the granulation, impeller current and torque were affected by the different lactose grades, the impeller current being higher with increasing lactose particle size. A positive correlation between the granule size and the particle size of the raw material was observed. It was found, in accordance with earlier results, that a higher amount of the binder solution enhances the size of the granules and does not improve granule flow properties or packing density. The granule friability was strongly affected by the particle size of the filler.