There have been significant advances in the understanding of wet granulation processes. Foam granulation is the latest development and an emerging area of interest for pharmaceutical manufacturing. Single foam penetration experiments were carried out on static powder beds, followed by short-nucleation experiments (where nuclei are formed by a nucleation-only mechanism) and full foam granulation experiments (where nucleation, growth and breakage are occurring simultaneously). All experiments were performed with lactose monohydrate powder using a 5 L high shear mixer-granulator. The foam penetration/dispersion behaviour was examined and the granule size distributions were investigated as a function of foam quality (83-97% FQ), impeller speed (105-515 rpm) and wet massing period (0-4 min). Nucleation in foam granulation is postulated to undergo either "foam drainage" or "mechanical dispersion" controlled mechanisms. For "foam drainage" mechanism, the foam penetrates the powder bed to form coarse and broad granule size distributions. For "mechanical dispersion" mechanism, the wetting and nucleation conditions are governed by the powder mixing conditions and similar granule size distributions are produced. Regardless of the mechanism, the initial wetting and nucleation behaviour controls the initial nuclei size distribution, and this initial distribution is retained in the final granule size distribution. This work demonstrated the critical importance of the nucleation and binder distribution in determining the granule size distributions for foam granulation process. (C) 2011 Elsevier Ltd. All rights reserved.