This research investigated a new technique known as foam granulation for the continuous manufacturing of pharmaceuticals by a twin screw extruder. Six grades of hypromellose were compared as binders in the trials, using two addition methods: foam injection by auxiliary side stuffer feeder and liquid injection directly into the extruder. The produced granules were tested for particle size, Carr compressibility index and characteristic fracture strength. It was found that granulation using foam injection improved powder lubrication inside the extruder and wetting uniformity of the lactose, as well as produced granules having lower Carr indices. (c) 2012 Canadian Society for Chemical Engineering