Chestnut is a relatively new nut crop to New Zealand and they do grow well in New Zealand conditions. Research to date in New Zealand indicated that New Zealand chestnuts present some unique features compared to chestnuts world wide. The two main unique problems with New Zealand chestnuts are the susceptibility to fungal disease Phomopsis (accounting for 40% loss of nuts at the wholesale markets) and the difficulty in the removal of the inner skin called the pellicle. No systematic drying trials had been performed on New Zealand chestnuts and therefore this research investigated the drying characteristics of New Zealand chestnuts to establish optimum drying conditions. The study also investigated the influence of the shell and pellicle on the drying process and the efficacy of shell and pellicle removal of New Zealand chestnuts under a range of moisture contents since the moisture content is a key factor which determines this efficiency. The drying trials were carried out at a temperature of 30 C because preliminary studies indicated that higher temperatures resulted in extensive surface deterioration. Experimental drying curves are considered the only adequate preliminary step for determination of drying characteristics of a food material and the curves clearly indicated that there are two distinct falling rate periods. It was concluded that the first falling rate period corresponded to the period during which the surface of the nut reaches equilibrium moisture content and the second falling rate period occurred as the moisture movement from interior of the nut to the surface was the rate limiting factor. Hence a diffusion based model was used to estimate the apparent moisture diffusivity in chestnuts. The average apparent moisture diffusivity in chestnuts obtained at 30 C was 6.21x 10-11m2s-1. The study revealed that the pellicle is the most significant barrier to mass transfer; considerably more so than the shell. The shelling and peeling efficiency of New Zealand chestnuts were carried out at various moisture contents using a custom-made mechanical shelling machine. The mechanical shell removal of New Zealand chestnuts was accomplished with an efficiency of 94% at the desired storage moisture content of 40%. However mechanical pellicle removal of New Zealand chestnuts proved practically impossible although American varieties (Carolina and Revival) exhibited 100% peeling efficiency.