Development of a new technique for producing spherical and well-compacted granules, and the application of fuzzy control to a fluidized bed granulation process are described. An agitation-fluidized bed, a type of fluidized bed equipped with an agitator blade, was used for granulation; bed height was controlled by fuzzy logic based on a linguistic algorithm employing IF-THEN rules, to maintain a constant bed height and impart effective agitation to the granules. It was shown that bed height control was effective in preventing defluidization and channeling, and was necessary for automatic operation. The effects of bed height and agitator rotational speed on granule properties, such as apparent density, and on granule shape were investigated. A new technique is proposed for utilizing bed height control to produce spherical and well-compacted granules, which cannot be done using conventional fluidized bed techniques.