In this work, a steady state simulation of a fertilizer granulation circuit is developed in order to study strategies for reducing the recycle ratio and improving circuit control. A two-stage population balance model for the continuous granulation drum is developed. This is based on an experimentally observed mechanism of granulation. Models developed for the screen and crusher units are validated against data from an operating granulation plant. Unit models are then used to develop a steady state simulation of the entire granulation circuit. Several case studies are performed to illustrate the effect of changing granulation model parameters, crusher and screen operating characteristics on circuit performance. Recycle ratio goes through a minimum as liquid content in the granulation drum increases. Operation is very sensitive near the liquid content where a second stage of granulation, which broadens the granule size distribution, begins. Multiple steady states are observed under some conditions, these are related to variations in granule porosity with recycle granule size distribution. A reduction in binder viscosity or granulation drum residence time improves circuit stability. Circuit operation is very sensitive to the efficiency of the crushing and screening station. Efficient crushing reduces recycle ratios at high liquid content and also improves circuit stability. A reduction in screen efficiency causes a large increase in the minimum obtainable recycle ratio.