Granules are essential for the ability of neutrophils to fulfill their role in innate immunity. Granule membranes contain proteins that react to environmental cues directing neutrophils to sites of infection and initiate generation of bactericidal oxygen species. Granules are densely packed with proteins that contribute to microbial killing when liberated to the phagosome or extracellularly. Granules are, however, highly heterogeneous and are traditionally subdivided into azurophil granules, specific granules, and gelatinase granules in addition to secretory vesicles. This review will address issues pertinent to formation of granules, which is a process intimately connected to maturation of neutrophils from their precursors in the bone marrow. We further discuss possible mechanisms by which decisions are made regarding sorting of proteins to constitutive secretion or storage in granules and how degranulation of granule subsets is regulated.