Parboiled paddy of two varieties namely Samba and Nadu were dried in a lab scale spouted bed dryer. Spouting behavior, drying kinetics and heat and mass transfer characteristics of parboiled paddy were investigated. The minimum spouting velocity for two varieties of parboiled paddy at three different bed heights was determined. Drying experiments were carried out to analyze the effect of drying temperature and air velocity on drying kinetics, moisture diffusivity and heat transfer coefficient. Results revealed that spouted bed drying operation with elevated temperatures shows higher drying rates. The spouted bed dryer spouting at different air velocities had almost similar drying rates at stable spouting state for a selected drying temperature and bed height. The effective moisture diffusivity showed increment with the temperature of drying air. The highest moisture diffusivities were 2.444 × 10^-13 m²/s and 2.427 × 10^-12 m²/s at 65 ^oC drying temperature for Samba and Nadu, respectively. Activation energy was calculated based on Arrhenius type equation and the values were 36.006 kJ/mol and 37.485 kJ/mol for Samba and Nadu, respectively. Heat transfer coefficient value ranged from 10.222 W/m²K to 17.213 W/m²K and 7.815 W/m²K to 11.931 W/m²K for Samba and Nadu, respectively. The heat transfer coefficient for both paddy varieties increased with airflow rate and decreased with the drying temperature.