An underwater pelletizing method for pelletizing brittle hydrocarbon resins with low melt viscosity. A feed material comprising the hydrocarbon resin is formed into a melt, extruded through a die into a water bath below the Tg of the hydrocarbon resin to form a plurality of extrudates and cut adjacent the die surface to form a slurry of resin pellets. A graft monomer and/or other reactants, such as a hydrosilylation agent, may be introduced into the resin melt to chemically modify the hydrocarbon resin.