Abstract: A fuel pellet made substantially of flax stem fiber. The fuel pellet is made from waste material available at minimal cost that produces pellets that burn at a high temperature, generate little smoke and less than about 4% ash residue, and can be stored for long periods without deteriorating. Preferred fuel pellets include at least about 60% flax stem fiber; wherein at least about 60% of the particles are less than about a quarter of an inch in length. The fuel pellet is processed by first selecting or processing the flax stem fiber so that it has a moisture content of from about 5 to about 12%. The bulk flax stem fiber material is then processed in a hammermill or the like to reduce the size of the fiber particles. The processed flax is then extruded through a commercial pelletizing machine. The pellets are then cut and then dried.