The current study's aim is to prepare lipid based sustained release tablets via a twin-screw granulation technique and compare those dosage forms with conventional techniques, namely wet granulation and direct compression. The granules were successfully manufactured in a single-step, continuous twin-screw granulation process with a low proportion of binder (Klucel™ EF, HPC SSL) using Compritol® 888 ATO, Precirol® ATO 5 and Geleol™ as sustained release agents. The granules prepared showed good flow characteristics and compaction properties. DSC and XRD studies were conducted to characterize the granules prepared via a twin-screw granulation method and the results demonstrated the crystalline nature of lipids within the granules. FTIR data indicated that there were no interactions with the formulation components investigated. The formulations developed by all three methods were compressed into tablets with a mechanical strength of 14–16 KP. The tablets formulated were characterized for physicochemical properties, in vitro drug release studies, water uptake and erosion studies. These results showed that the drug was not completely released after 24 h for tablets developed by the wet granulation process using all three lipids. The tablets prepared by the direct compression method demonstrated a burst release within 8 to 10 h from Precirol ATO 5® and Geleol™ formulations compared to Compritol® 888 ATO. However, tablets prepared using twin-screw granulation exhibited sustained release of the drug over 24 h and the water uptake and erosion results were in accordance with dissolution data. Stability data for 45 days at accelerated conditions (40 °C/75% RH) showed similar release profiles with ƒ2 values above 50 for all of the twin screw granulation formulations, indicating the suitability of the process for formulating sustained release tablets. These findings of a single-step, continuous twin-screw granulation process are novel and demonstrate new opportunities for development of sustained release tablets.