Pelletization is a process of transforming loose biomass into dense pellets of specific sizes for easy handling, transport and storage. The process involves with series of operations – drying, size reduction, pelletization (also called densification), cooling, screening and storage/packaging. Drying is the major energy consuming operation, when the biomass is available at high moisture content (~50%). In this study, two types of biomass: sawmill residue (sawdust) and switchgrass as a raw material to produce densified pellets for heat and power generation applications were considered. Sawdust was available for pelleting process at 50% moisture content and required drying steps to produce pellets. Whereas, switchgrass was available at about 15-20% moisture content and did not require any further drying steps before pelletization. A life cycle assessment approach was used to quantify total energy use and environmental emissions for the entire life cycle starting from biomass production, transport to the pellet plant, pelletization process, transport of pellets to the combustion plant and transport of ash to the land application for its final disposal. For sawdust pelleting scenario, energy and environmental emissions to produce sawdust was not considered as it was assumed as a waste material from sawmill (Or allocation of resources were based on the value of the final sawmill products). Whereas for switchgrass pelleting scenario, all the resources used for production of switchgrass was included in the life cycle estimation. Emission inventory data for each of the life cycle stages was used from literature sources, environmental protection agency (EPA) and LCI databases (Franklin USA, Ecoinvent and GHGenius). Environmental impacts of total gaseous emissions were evaluated based on greenhouse gas emission, acid rain formation, smog formation and human toxicity impacts. The energy use and environmental impacts were compared for both sawdust pelleting and switchgrass pelleting scenarios.