Particle segregation in spouted beds is shown to result from different trajectories of heavy and light particles in the fountain region, lighter particles tending to scatter more in the radial direction than heavier ones. Some desegregation occurred due to rolling along the inclined annulus surface and due to mixing processes in the spout. Segregation is less severe for overdeveloped fountains, where the particles bounce off the outer wall, and for low bed depths, where the fountain is dilute. Segregation can also be countered by a conical baffle which deflects particles outwards from the core of the fountain.