The present invention provides a novel and stable hydrated form of erlotinib free base, and a process for its preparation thereof. The present invention also provides a process for preparation of erlotinib hydrochloride crystalline polymorph a substantially free of polymorph B. The present invention further relates to erlotinib hydrochloride crystalline particles having mean particle size (D50) ranging from about 4 μm to 15 μm and 90 volume-% of the particles (D90) ranging from about 14 μm to 30 μm, to the methods for the manufacture of said crystalline particles, and to pharmaceutical compositions comprising said crystalline particles.