Converter dust is a kind of solid waste in the metallurgical steelmaking process. It can make cold bonded pellets via adding binder return to converter for recycling, because of its high content of total iron (TFe) and alkaline oxide. Due to the expansion of digestion reaction of ƒ-CaO and MgO in the converter dust, the pellets are cracked and the strength is reduced. The study compared the effects of sodium silicate, sodium humate, and MgO-based binders on the strength, cracking rate, and moisture content of cold bonded pellets. The results show that the pellets prepared by the MgO-based binder have no cracking, high strength, and low moisture content. X-ray diffraction (XRD) and scanning electron microscopy (SEM) were used to clarify the principle of MgO-based binder controlling cracking. It is a hydration reaction with MgO in the converter dust, which absorbs a large amount of free water and avoids the digestion and cracking. Meanwhile, it generates the adhesive nonhydraulic gels, which form a connecting bridge after solidification to increase the pellet strength.