Pelletization is a technique to convert drugs or excipients to small free flowing, spherical or semi spherical units, which are produced by agglomerating fine powdered drug/excipients with a binder solution. Pellets range in size, typically, between 0.5 – 2.0 mm. MUPS (Multiple Unit Pellet Systems) are multi- particulate in nature and are administered as tablets. These tablets disperse in stomach and intestine allowing constant drug release in systemic circulation. This article reviews the advantages, disadvantages, common industrial technique for preparation of pellets and challenges in manufacturing of MUPS.