Briquettes produced from agro-residues are fairly good substitute for coal, lignite and firewood. Briquettes from saw dust have high specific density of 1400 kg/m3 compared to bulk density of 210 kg/m3 (approx.) of loose saw dust. Loading/unloading, transportation and storage costs of agro-residues are drastically reduced if they are converted in the form of briquettes. Formation of briquettes at the very site of its production stops air pollution to a large extent. Hence briquetting of saw dust produces renewable and environment friendly source of energy. In this paper an attempt is made to design and fabricate briquetting machine for saw dust on lab scale to produce briquettes at the rate of 7kg/hr.Effect of moisture content in saw dust and binders used have been studied on briquette density, power consumption/kg of briquette produced and calorific value/kg of briquette. Thermal efficiency of chulha (local stove) using prepared briquette was obtained to be 5%.