Berberine is a natural quaternary ammonium alkaloid used clinically in the chloride salt form for the treatment of diarrhea in many Asian countries. Although the hydrate formation of berberine chloride (BCl) is well documented, the associated mechanism and implications in pharmaceutical formulation have not been studied in detail. In this study, pure BCl dihydrate and BCl tetrahydrate were recrystallized from water and their phase transformation behaviors under defined conditions were investigated. Additionally, pharmacopoeial grade BCl material consisting predominantly of the dihydrate form was examined for potential phase changes when being subjected to a conventional wet granulation procedure for tablet production. Results from solubility measurements, thermal analysis, variable temperature-powder X-ray diffraction (VT-PXRD), and variable temperature-Fourier transform infrared spectroscopy (VT-FTIR) confirmed the solid-state interconversions between the tetrahydrate and dihydrate at 30-498C and between the dihydrate and anhydrate at 70-878C. Consistent with the observed phase changes of the two pure hydrates, wet massing of the pharmacopoeial grade BCl sample led to a thermodynamics-driven transition to the tetrahydrate form at room temperature while subsequent tray drying at 508C caused a reversion back to the dihydrate form. The rate and extent of such hydrate conversion depended largely on the water activity of the granulated powder matrix, which in turn was governed by the particular excipients employed. The present findings have important implications in the regulation of the hydrate forms of BCl in the finished products using specific excipients.