Spray drying is one of the most convenient methods for drying suspensions (slurries) and for granulation of materials. Spray dried powders have good flowability, narrow size distribution and controllable morphology. Morphology of powder particles (also called granules or microspheres) strongly affects the use and handling of powders. This review discusses the latest research on parameters that affect morphology and size of granules obtained by spray drying: atomization parameters, properties of sprayed slurry, mass transfer etc. The formation of hollow and dense granules is extensively reviewed. Granule size is affected by droplet size, slurry concentration and initial particle size. Morphology mostly depends on size distribution of initial ceramic particles, agglomeration tendency in the slurry and mechanical strength of the shell of a granule during the drying process compared to capillary force of the suspension liquid. Polymer additives (e.g. binders and lubricants) change the properties of granule shell and the evaporation of moisture; thus, polymer additives significantly affect morphology.