The aim of this study is to investigate the changes in physical and chemical surface properties of a fine lactose powder, which has been processed by a mechanical dry coating approach. A commercially available milled lactose monohydrate powder (median diameter around 20 I?m) was dry coated with a pharmaceutical lubricant, magnesium stearate (MgSt). Substantial changes in bulk behavior have been shown previously and the purpose of the current work was to understand the relationship between these bulk changes and physico-chemical changes in the surface. X-ray photoelectron spectroscopy and time-of-flight secondary ion mass spectrometry results demonstrated both qualitatively and quantitatively how the chemical properties of the lactose particle surfaces had been altered. The characterization results indicated that a high-level coverage of a thin coating layer of MgSt has been created through the coating. Inverse gas chromatography was used to probe the surface energetic changes, and at conditions of finite dilution, provided a new insight into surface energy changes. This work demonstrated that the modifications of the surface physical and chemical properties correlated with the reduction in powder cohesion and improvement in powder flow.