Bioenergy is one of many contributors to reducing the use of fossil fuels in order to mitigate climate change by decreasing CO2-emissions, and the potential for biofuels are large. The wood fuel pellets are a refined biofuel made of sawdust, which is dried and compressed to achieve improved fuel and transportation properties. In 2007 the amount of wood fuel pellets used for heating purposes in Sweden was 1715000 tons. The aims of this work was: to examine the moisture content and emission of monoterpenes during the drying and pelletising steps of the pellets production (Paper I); to investigate how the recirculation of drying gases affects the energy efficiency of rotary dryers and how the energy efficiency is related to the capacity of the dryer. (Paper II); to analyse the causes of the problems encountered by household end-users of pellets and investigate whether an improved pellet quality standard could reduce these problems (Paper III); to investigate how the energy consumption of the pelletising machine and chosen pellet quality parameters were affected using an increased amount of rapeseed cake in wood fuel pellets (Paper IV); and to identify gaps of knowledge about wood fuel pellet technology and needs for further research on quality, environmental and health aspects throughout the wood fuel pellet chain, from sawdust to heat. (Paper V).