Purpose: Albendazole is a poorly soluble drug which limits its oral bioavailability. The study was focussed to enhance the solubility by in-situ micronization.Methods: Albendazole microcrystals were prepared by solvent change method using gum karaya and hupu gum as stabilizing agents and the effect of each stabilizer on the prepared microcrystals were studied. FT-IR, DSC, XRD and SEM analysis were performed as a part of characterization studies. The formulations were evaluated for micromeritics, solubility and drug release. The microcrystals that had shown optimized properties were filled into suitable capsules.Results: The formulations showed reduction in particle size with uniform size distribution and three folds increase in drug release. The microcrystals had shown more than 100-folds increase in solubility compared to pure drug. Surface energy, enthalpy and crystalline nature of microcrystals were found to be reduced. Microcrystals containing gum karaya had shown more drug release. The filled-in capsules also showed increase in drug release rate. The solubility enhancement of albendazole microcrystals was mainly due to the surface adsorption of the stabilizing agents that led to reduction in surface energy and crystalline nature as substantiated by the DSC and XRD studies. The type of stabilizing agent had significant effect on dissolution rate. High affinity of albendazole with gum karaya led to faster drug release profiles.Conclusion: The study proved that in-situ micronization is an effective technique to enhance the solubility and dissolution rate of poorly soluble drugs like albendazole.