The modification of a twin screw extruder for continuous wet granulation was investigated. Modification of the extruder setup as well as the screw design allowed the continuous wet granulation of α-lactose monohydrate without the need of a wet sieving step. The robustness of twin screw granulation was evaluated by studying the influence of processing parameters and formulation variables on the process performance and on the properties of α-lactose monohydrate granules and tablets. The process reproducibility during long term production was evaluated. Screw speed (200–450 rpm) and total input rate (5.5–9.5 kg/h) had no significant influence on the granule properties, while the water concentration during granulation influenced the process as well as the granule properties. At a water concentration (calculated on wet granule basis) of 5.5–8.5%, continuous twin screw granulation of α-lactose monohydrate 200M was feasible and the granules obtained had good properties. PVP addition mainly affected tablet properties. Tablets made from granules containing 2.5% PVP had a tensile strength above 0.94 MPa, a friability below 1% and a disintegration time ranging between 495 and 576 s. Tablets containing hydrochlorothiazide complied with the dissolution requirements as 60% was released after 5 and 15 min from tablets without PVP and with 2.5% PVP, respectively. No problems were observed during continuous twin screw granulation over a period of 8 h and the granule and tablet properties were reproducible throughout the process. These results indicated that twin screw granulation is an efficient tool for continuous wet granulation.