Coated agglomerate pelletization (CAP) process is being developed for the fabrication of ThO₂–UO₂ mixed oxide fuel pellets. The procedure for the fabrication of ThO₂–4%UO₂ and ThO₂–20%UO₂ pellets by this process has been described in detail in part I of this series of papers. The present part II deals with the characterization of the above pellets by optical microscopy, scanning electron microscopy (SEM) and electron probe microanalysis (EPMA). The microstructure of the ThO₂–4%UO₂ and ThO₂–20%UO₂ pellets showed a duplex grain structure. Thermal expansion and thermal conductivity were measured in the temperature range from room temperature to 1500^oC. It was found that the thermal conductivity decreased by the addition of UO₂ to ThO₂ at any temperature. Addition of 20%UO₂ to ThO₂ caused very large decrease in thermal conductivity. The thermal expansion of ThO₂–20%UO₂ pellet was different from that of ThO₂ and ThO₂–4%UO₂, e.g. it increased more rapidly with increasing temperature in the temperature range of 1000–1500^oC.