Foam granulation is a newly developed method for the wet agglomeration of powders, displaying much improved process stability in extrusion machinery compared to conventional drop-wise liquid addition approaches. This paper examines aspects of foamed binder addition during the granulation of lactose monohydrate with different hydroxypropyl methylcellulose species. The work looks at the generation of foams with differing liquid drainage and shear stability behaviors based on varying the volume fraction of the dispersed gas and the binder viscosity for the liquid phase. Final granule properties related to their size and fracture strength showed strong dependency on the operating conditions of the process, indicating a mechanical dispersion controlled nucleation mechanism. Foam properties influencing the process were most strongly controlled by the binder viscosity, with lower viscosity solutions giving larger, more consolidated granules. A two-region nucleation zone model was proposed for the extruder based observations and experimental data. (C) 2012 Elsevier B.V. All rights reserved.