Formaldehyde is commonly used in urea granulation or prilling in order to improve the physical strength of the product and serves as an anti-caking agent for the products. In urea granulation, formaldehyde also has a function as granulating aid to improve the product build up and reducing the dust formation during spraying. This paper describes in detail the function and properties of formaldehyde in urea granulation and the various reactions between urea and formaldehyde.