An atypical high-shear granulation process is investigated in which a fine inert powder is bound with a highly viscous surfactant paste. The mechanism comprises adsorption of powder particles onto paste fragments, breakage of powder-coated paste granules, micro-mixing of the granules with incorporation of the powder, granule growth via coalescence, and finally granule consolidation. These stages are supported by micrographic and granule size distribution data. The agglomeration process features two main mechanisms, namely binder distribution followed by granule consolidation and coalescence, the transition between which is shown to be dependent upon the operating parameters. A number of time-dependent consistency regimes can be identified and quantitatively described using bulk tapping compaction tests. Of particular interest is the trend in Hausner ratio, which provides information on the inter-granular friction and cohesivity. Various pseudo-steady state tapping parameters are used to track the agglomeration process, the results of which are consistent with the Iveson et al. (2001 a, Powder Technology 117, 83-97) steady state agglomeration regime maps. The effects of paste/powder composition, paste theology and mixing speed upon the agglomeration rate can be explained physically in terms of adsorption, viscous and mechanical energy dissipation mechanisms. In summary, the work introduces a preliminary analysis of an immersion-granulation mechanism in which a number of key features are identified. (c) 2005 Elsevier Ltd. All rights reserved.