Process-induced transformations are very important to control during pharmaceutical manufacturing because they may change the properties of the active pharmaceutical ingredient in the drug product, compromising therapeutic efficacy. One process that may facilitate a process-induced transformation is high-shear wet granulation. In this study, the feasibility of Raman spectroscopy for in-line monitoring of the transformation of theophylline anhydrous to theophylline monohydrate during high-shear wet granulation has been evaluated. The midpoint of conversion occurred 3 min after the binder solution was added. The effects of several processing parameters were also examined, including mixing speed and monohydrate seeding. Mixing speed had the greatest effect on the transformation, where an increase in mixing speed shortened the onset time and increased the rate of transformation. In contrast, seeding with monohydrate or changing the way in which the binder was incorporated into the granules did not affect the transformation profile. The transformation kinetics observed during wet granulation were compared with those generated by a simple model describing the solvent-mediated transformation of theophylline in solution. In conclusion, these studies show that Raman spectroscopy can be used for in-line monitoring of solid-state transformations during wet granulation. In addition, for this particular compound, a simple solvent-mediated transformation model has been shown to be useful for estimating the time scale for hydrate formation during high-shear wet granulation.