The coalescence and fragmentation of particles in a dispersion system are investigated by applying kinetic theory methods, namely, by generalizing the Boltzmann kinetic equation to coalescence and fragmentation processes. Dynamic equations for the particle concentrations in the system are derived using the kinetic equations of motion. For particle coalescence and fragmentation, equations for the particle momentum, coordinate, and mass distribution functions are obtained and the coalescence and fragmentation coefficients are calculated. The equilibrium mass and velocity distribution functions of the particles in the dispersion system are found in the approximation of an active terminal group (Becker–Döring-type equation). The transition to a continuum description is performed. © 2017, Pleiades Publishing, Ltd.