This paper presents theoretical and experimental research studying the influence of process parameters on the quality of biomass pellets. A validated mathematical model was developed, expressing the density of biomass pellets as determined by moisture content, compression pressure, process heat, the initial density of the material, pelleting speed and initial volume of the material. The experiments for determining the influence of these parameters on the compression of biomass into pellets and optimizing the process were conducted on a heated single pellet compression device, using fir sawdust as raw material. To describe and study the process, four input and control parameters were varied—raw material moisture, pelleting speed, maximum force applied and pelleting die temperature. From the experiments, it was noticed that overall, moisture and pressure have the most important effect on the compression process and pelleting speed, and heat applied also affected the process. Pellet density decreased when pelleting speed and material moisture increase and the density increased with a higher compression pressure and higher heat during the process.