MgO addition to pellets improves their high temperature properties by improving the oxide and slag phases. In the present study, effect of MgO, in the form of magnesite flux, on pellet quality, melt formation and microstructure during the induration was examined. Fired pellets with varying MgO contents (0 to 3.0%) were tested for cold crushing strength, reduction degradation index, reducibility and swelling characteristics. Optical microstructural studies with image analysis were carried out to estimate the amount of different phases. SEM-EDS analysis was done to measure the chemical analysis of oxide and slag phases. X-ray mapping was also carried out to understand the distribution of CaO, MgO, SiO2 and Al2O3 in different phases. From the results, it was observed that with increasing MgO, RDI and swelling characteristics of pellets were found to be improved. Reducibility of the pellets improved substantially in the range of 0.5 to 1.5% MgO. Formation of magnesioferrite phase and high melting point slag formed during induration could be attributed to the improved quality of pellets. Pellets with 2 to 3% magnesite addition, to get 1.0 to 1.5% MgO, exhibited optimum metallurgical properties among all the pellets studied. (c) 2012 Elsevier B.V. All rights reserved.