Abstract Size, shape and density of biomass particles influence their transportation, fluidization, rates of drying and thermal decomposition. Pelleting wood particles increases the particle density and reduces the variability of physical properties among biomass particles. In this study, pine chips prepared for pulping and commercially produced pine pellets were ground in a hammer mill using grinder screens of 3.2, 6.3, 12.7 and 25.4 mm perforations. Pellets consumed about 7 times lower specific grinding energy than chips to produce the same size of particles. Grinding pellets produced the smaller particles with narrower size distribution than grinding chips. Derived shape factors in digital image analysis showed that chip particles were rectangular and had the aspect ratios about one third of pellet particles. Pellet particles were more circular shape. The mechanical sieving underestimated the actual particle size and did not represent the size of particles correctly. Instead, digital imaging is preferred. Angle of repose and compressibility tests represented the flow properties of ground particles. Pellet particles made a less compacted bulk, had lower cohesion and did flow easier in a pile of particles. Particle shape affected the flow properties more than particle size.