Fluidized bed combustion is suitable for burning of a wide range of waste materials and gives reasonable combustion efficiency along with high combustion intensity. In the present work, combustion studies of groundnut shells were conducted in an atmospheric fluidized bed under high excess air environment. The temperature profiles in the fluidized bed during the combustion process indicate a considerable burning of fuel particles in the free board zone rather than complete burning within the bed. Therefore, an enlarged disengagement section is provided to improve combustion of fines. The change in temperature profiles along the bed height at different feed rates is observed. The feed rate of groundnut shells corresponding to the maximum possible temperature has been observed at 9.3 kg/h, respectively. It is observed that 35-45% excess air is optimal to reduce carbon loss during burning of groundnut shells. The maximum possible combustion efficiency with groundnut shell is 99.3% and is observed at 72% excess air.