Densification can partially resolve the logistical challenges encountered when large volumes of biomass are required for bioconversion processes to benefit from economies-of-scale. Despite the higher bulk density of pellets, their lower mechanical strength and sensitivity to moisture are still recurring issues hindering long term transportation and storage. In this study, we have evaluated the potential benefits of SO2-catalyzed steam treatment to achieve both the needed size reduction prior to pelletization while improving the stability of the produced pellets. This pretreatment substantially reduced the particle size of the woodchips eliminating any further grinding. The treated pellets had a higher density and exhibited a two-time higher mechanical strength compared to untreated pellets. Despite a higher moisture adsorption capacity, treated pellets remained intact even under highly humid conditions. The high heating values, low ash content and good overall carbohydrate recovery of treated pellets indicated their potential suitability for both biochemical and thermochemical applications. (C) 2012 Elsevier Ltd. All rights reserved.