Biomass is considered to be a major potential fuel and renewable resource for the future. In fact, there is high potential to produce the large amount of energy from biomass around the world. In this study, to obtain basic data for practical application of wood pellet and wood pellet boiler system as heating system in agriculture, agricultural biomass resources were surveyed, pellet was made of agricultural by-product such as stem of rape, oat and rice, ricehusk and sawdust and wood pellet boiler system with capacity of 116 kW was manufactured and installed in greenhouse of $38.5m{\times}32m$. High heating value, bulk density and ash content of pellet made of agricultural by-product and efficiency and heating performance of this system was estimated. Rice straw was the largest agricultural biomass in 2005 and the total amount of rice straw converted into energy of $131.71{\times}10^{11}$ kJ. And in 2005, total amount of forest' by-product converted into energy of $29,277.05{\times}10^{11}$ kJ. High heating values of pellets made of agricultural by-products of stem and seed of rape, stem of oat, rice straw and rice husk were 16,034, 16,026, 16,089, 15,650, 15,044 kJ/kg respectively. High heating values of pellets made of agricultural by-products were 83.6% compared to that of wood pellet. Average bulk density of pellets made of agricultural by-products of stem and seed of rape, stem of oat, rice straw and rice husk was 1,400 $kg/m^3$. Ash contents of the pellets were 6.6, 7.0, 6.2, 5.5, 33% respectively. Ash content of rice husk pellet was the largest compared to other kind of pellets. To increase efficiency of agricultural pellet boiler, the boiler adopted secondary heat exchanger. The agricultural pellet boiler designed and manufactured in this study had high efficiency of 84.2% compared to the conventional agricultural pellet boiler, when water flow rate, exhaust gas temperature and average combustion furnace temperature were 39L/min, $180^{\circ}C$, $680^{\circ}C$ respectively. And pellet supplying and pausing time were 13, 43 seconds respectively. In March of 2010, prices of wood pellet, agricultural tax free diesel, diesel, kerosene were 350 won/kg, 811 won/L, 1,422 won/L, 976 Won/L respectively. Also in terms of energy, prices per same heating value were 77.8, 90.1, 158, 108.4 Won/Mcal. Energy saving rate of wood pellet was 16, 50, 39% compared to agricultural tax free diesel, diesel and kerosene respectively.