Abstract Although pelletization process is a world wide known technique in the production of artificial aggregates, it has not been widely used in construction sector. The 1985 figures show that overall pellet production for use as metallurgical product was 435 million tons and with respect to statistical figures that belong to 1989 the agglomerated product use in construction sector as lightweight aggregate was only 1.2 million tons. The reasons of low utilization of coal combustion by-products as lightweight aggregates in the construction sector are: — the availability of natural resource products and relatively higher costs of agglomeration process due to initial investments and — energy requiring curing procedures to obtain adequate strength for construction applications (e.g. steam curing and sintering). However, depending on the agglomerated materials’ properties and process efficiency, artificial aggregates with adequate engineering performance may be produced by moisture treatment under atmospheric conditions. In this study, the engineering performance of moist cured fly ash pellets including the effect of lime and cement additions both for geotechnical application and concrete production purposes were investigated and the results obtained are quite satisfactory for the related design requirements.