In this paper, the technology of producing fluxed pellets by using hydrated lime as binder instead of bentonite was carried out. The properties of the two types green balls (0.8 per cent bentonite and 2.0 per cent hydrated lime) were as follows: drop numbers of 4.8 - 5.0 times/0.5 m, compressive strength of 19.7 - 24.2 N/pellet and thermal shock temperature of 280 - 385, respectively, under the same conditions of 1.5 per cent coke, 1.45 basicity and balling at 8.5 per cent moisture for 13 min in disc pelletiser. Comparing with bentonite as binder, the compressive strength of fired pellets with hydrated lime is elevated by 13.8 per cent and climbs up to 3113 N/pellet under the following conditions: preheating at 1050C for ten minutes and fi ring at 1300C for 15 min. In the mean time, the hydrated lime also improves the metallurgical performance of fired pellets. The reduction index was enhanced from 68.6 - 70.6 per cent, RDI+3.15+ increased from 90.1 to 98.8 per cent and reduction swelling index dropped from 22.4 - 7.4 per cent, respectively. The mineral compositions and microstructure of fi red pellets shows that the fired pellets containing 2.0 per cent possess more calcium ferrite and magnesium ferrite and compact microstructure, leading to the higher compressive strength.