Background: Microcrystalline cellulose (MCC) is an excellent excipient for the production of pellets by extrusion spheronization. However, it causes slow release rate of poorly water soluble drugs from pellets.Co-processed excipient prepared by spray drying (US4744987; US5686107; WO2003051338) and coprecipitation technique (WO9517831) are patented. Objective: The objective of present study was to develop co-processed MCC pellets (MOMLETS) by extrusion-spheronization technique using the principle of Quality by Design (QbD). Methods: Co-processed excipient core pellets (MOMLETS) were developed by extrusion spheronization technique using Quality by Design (QbD) approach. BCS class II drug (telmisartan) was layered onto it in a fluidized bed processor. Results: Quality Target Product Profile (QTPP) and Critical Quality Attributes (CQA) for pellets were identified. Risk assessment was reported using Ishikawa diagram. Plackett Burman design was used to check the effect of seven independent variables; superdisintegrant, extruder speed, ethanol: water, spheronizer speed, extruder screen, pore former and MCC: lactose; on percentage drug release at 30 min. Pareto chart and normal probability plot was constructed to identify the significant factors. Box–Behnken design (BBD) using three most significant factors (Extruder screen size, type of superdisintegrant and type of pore former) was used as an optimization design. The control space was identified in which desired quality of the pellets can be obtained. Conclusion: Co-processed excipient core pellets (MOMLETS) were successfully developed by QbD approach. Versatility, Industrial scalability and simplicity are the main features of the proposed research.