At present 40% of the drugs within the development pipelines, and approximately 60 % of the drugs coming directly from synthesis area unit poorly soluble. Solubility is one of the important parameter to obtain desired concentration of drug in systemic circulation. Liquisolid compacts technique is a new and promising approach to overcome this consequence and that can change the dissolution rate of water insoluble drugs and increase the bioavailability of the drugs. This technique is an efficient method for formulating water insoluble and water soluble drugs. This technique relies upon the admixture of drug loaded solutions with applicable carrier and coating materials. Liquisolid system is characterized by flow behaviour, wettability, powder bed hydrophilicity, saturation solubility, drug content, differential scanning calorimetry, Fourier transform infra-red spectroscopy, powder X-ray diffraction, scanning electron microscopy, in-vitro release and in-vivo evaluation. This review article explains the preparation, classification and application of liquisolid system.