This paper presents the significant progress made in the research and development (R&D) of key technologies on the water-cooled solid breeder blanket for the ITER test blanket modules in JAERI. Development of module fabrication technology, bonding technology of armours, measurement of thermo-mechanical properties of pebble beds, neutronics studies on a blanket module mockup and tritium release behaviour from a Li2TiO3 pebble bed under neutron-pulsed operation conditions are summarized. With the improvement of the heat treatment process for blanket module fabrication, a fine-grained microstructure of F82H can be obtained by homogenizing it at 1150 degrees C followed by normalizing it at 930 degrees C after the hot isostatic pressing process. Moreover, a promising bonding process for a tungsten armour and an F82H structural material was developed using a solid-state bonding method based on uniaxial hot compression without any artificial compliant layer. As a result of high heat flux tests of F82H first wall mockups, it has been confirmed that a fatigue lifetime correlation, which was developed for the ITER divertor, can be made applicable for the F82H first wall mockup. As for R&D on the breeder material, Li2TiO3, the effect of compression loads on effective thermal conductivity of pebble beds has been clarified for the Li2TiO3 pebble bed. The tritium breeding ratio of a simulated multi-layer blanket structure has successfully been measured using 14 MeV neutrons with an accuracy of 10%. The tritium release rate from the Li2TiO3 pebble has also been successfully measured with pulsed neutron irradiation, which simulates ITER operation.