Absorption of a drug through the oral route involves its dissolution from the formulation into gastric and/ or intestinal fluids followed by its permeation through gastrointestinal cell membranes and finally into the systemic circulation. Oral solid dosage forms are one of the most commonly used formulation types having multiple benefits over other formulations/routes. However, the challenge for a pharmaceutical scientist lies in the fact that dissolution of a drug from an oral solid formulation (a key factor in drug absorption) is dependent on the aqueous solubility of the drug. Therefore, a drug with poor aqueous solubility would exhibit dissolution rate limited absorption and similarly a drug possessing poor membrane permeability undergo permeation rate limited absorption. A drug is highly soluble when highest dose of drug is soluble in ≤250 ml of water over a pH range of 1 to 7.5 and a drug is highly permeable when extent of absorption in humans is to be ≥90% of an administered dose [1] . It has been investigated that most of new chemical entities currently being discovered and intended to be used as a solid dosage form should produce an efficient and reproducible plasma concentration after oral administration. However, most of them tend to have poor water solubility, which limits the therapeutic efficacy of that drug. Moreover, poor solubility results in increased dose and frequent administration leading to higher incidences of side-effects [2][3][4][5][6] . Hence, pharmaceutical research has emphasised on elevating the oral bioavailability of poorly water-soluble drugs by improving their solubility, dissolution rate and membrane permeability. Solubility is an important determinant in drug liberation and hence drug absorption, which plays a key role in oral bioavailability of formulations. The dissolution rate of a drug directly depends upon its solubility. Most of the new drugs have poor water solubility; thereby pose a difficulty in formulating into drug delivery systems. Therefore, solubility enhancement of poorly water soluble drugs is one of the necessary preformulation steps in the pharmaceutical product development research. Solid dispersion is a unique and promising approach for enhancing the dissolution characteristics and oral bioavailability of poorly water-soluble drugs. The present review highlights portrayal of solid dispersions, its types including eutectic mixtures and solid solutions, method of preparation and also the useful carriers for the preparation of solid dispersions. Furthermore, the wide research conducted hitherto on solid dispersions for enhancing solubility of different efficacious drugs, challenges encountered in the development of solid dispersions and recent advancements to overcome its pitfalls have also been elaborated.