Size reduction of microcrystalline cellulose (MCC, Avicel(R) PH-101) powder by ball milling was poorly effective, particularly in the presence of sodium lauryl sulphate (SLS), which tended to form a protective foam. Ultrasonic homogenisation of an aqueous suspension more readily produced ultra-fine MCC, even in the presence of the surfactant and two other de-aggregating agents, and factorial experimentation was used to optimise the process. The product was recovered by spray-drying and readily redispersed in water without re-aggregation. Two new grades of ultra-tine MCC, prepared by an optimised treatment with or without 1% SLS, were characterised by a range of techniques in comparison to the starting coarser grade, Avicel(R) PH-101. Mercury porosimetry and scanning electron microscopy confirmed the less porous and smaller particle size of the new grades, where deposition of SLS as a coating was evident. Surface area determination confirmed that the size-reduced grades had larger specific surface areas, particularly the SLS treated material. Low temperature DSC and X-ray diffraction studies suggested that the new ultra-fine grades were more amorphous. Collectively the results indicate that the new grades should have unique functionality, possibly of benefit in pharmaceutical formulation. (C) 2001 Elsevier Science B.V. All rights reserved.