Overmixing of magnesium stearate with granules in the hopper of a capsule filling machine can slow down their dissolution because of coating by magnesium stearate, which acts as a water repellant. This phenomenon was systematically investigated using three active ingredients representing a wide range of solubility in 0.1 N hydrochloric acid, the dissolution medium. The active ingredients were hydrochlorothiazide, an antiviral agent SQ32756 (BV-araU), and aztreonam, with solubilities in 0.1 N hydrochloric acid of 0.6, 5.0 and 12 mg/ml, respectively, at 37°C. When capsules of an aqueous wet granulated formulation containing one of the aforementioned active ingredients, hydrous lactose, pregelatinized starch, microcrystalline cellulose, and 1% w/w magnesium stearate were filled using the MG2 Futura capsule filler, capsules from the latter part of the filling run exhibited significantly slower dissolution compared to those from the beginning. The extent of slowdown in dissolution of the capsules varied depending upon the aqueous solubility of the active ingredient. The slowdown was maximum for hydrochlorothiazide capsules followed by SQ32756 and aztreonam capsules, respectively. Further studies using SQ32756 as the active ingredient indicated that replacement of magnesium stearate in the formulation with other hydrophobic lubricants such as calcium or zinc stearate gave similar results. However, replacement of magnesium stearate with hydrophilic lubricants such as Stear-O-Wet® or sodium stearyl fumarate did not result in a slowing of dissolution. Among the hydrophobic lubricants, magnesium stearate caused the maximum slowdown in dissolution, followed by zinc and calcium stearates, respectively. This observed rank order was correlated to the surface area of these lubricants. Furthermore, optimization of magnesium stearate concentration to 0.25% w/w provided enough lubrication for capsule filling while resulting in a capsule with satisfactory dissolution. Replacement of pregelatinized starch by starch-derived superdisintegrants such as Explotab® or Primojel® also resulted in no slowing of dissolution of capsules, even after overmixing with 1% w/w magnesium stearate. Although the granules overmixed with 1% w/w hydrophobic lubricants exhibited slow down in dissolution when filled into capsules, tablets compressed from these granules dissolved rapidly.