Both the beans and nibs are shelled but the beans still have the peel on them (like the skin on a peanut). The nibs are peeled and sometimes lightly crushed. The skin on the bean is supposedly edible, but if you don't like the skin, I would recommend getting the nibs. I got whole beans once and I still have a bunch since they were a pain to peel. I gave up and ground them up skin and all in my coffee grinder when I used them.