Coal combustion residues which include fly ash, bottom ash and boiler slag is one of the major pollutants as these residues require large land area for their disposal. Among these residues, utilization of bottom ash in the construction industry is very low. This paper explains the use of bottom ash through pelletization. Raw bottom ash could not be pelletized as such due to its coarseness. Though pulverized bottom ash could be pelletized, the pelletization efficiency was low, and the aggregates were too weak to withstand the handling stresses. To improve the pelletization efficiency, different clay and cementitious binders were used with bottom ash. The influence of different factors and their interaction effects were studied on the duration of pelletization process and the pelletization efficiency through fractional factorial design. Addition of binders facilitated conversion of low-calcium bottom ash into aggregates. To achieve maximum pelletization efficiency, the binder content and moisture requirements vary with type of binder. Addition of Ca(OH)2 improved the (i) pelletization efficiency, (ii) reduced the duration of pelletization process from an average of 14-7min, and (iii) reduced the binder dosage for a given pelletization efficiency. For aggregate with clay binders and cementitious binder, Ca(OH)2 and binder dosage have significant effect in reducing the duration of pelletization process. © 2010 Elsevier Ltd.