The aim of this work was to develop the sustained release formulation of donepezil hydrochloride (DH) using the hot-melt extruded solid dispersion technique via the rational screening of hydrophobic carriers. Hydrophobic carriers with different physicochemical properties such as pH-independent swellability, low-permeability (Eudragit® RS PO (E-RS)), pH-independent non-swellability (ethyl cellulose N7 (EC-N7)), and the presence of lipids (Compritol® 888 ATO (C-888)) with or without pore-forming agents were used to achieve the sustained release profile of DH. Mannitol (MNT) was chosen as the temporary pore-forming agent. The thermal analysis showed that both the drug and C-888 preserved their crystallinity within a solid dispersion. During a dissolution test, MNT could generate pores, and the drug release rate was proportionally correlated to the MNT content. Tailoring of the ratio of C-888 and MNT in the formulations along with an appropriate extrusion temperature profile resulted in the modified release of DH, and a preferable release pattern was obtained under these conditions. C-888 was chosen for the further investigations to obtain tablets with a high integrity. The optimized tablets were compared to the marketed formulation of Aricept® in terms of drug release profiles. The optimized formulation showed the stable and sustained release behavior of extended release profile, which was close to the release behavior of Aricept® with good tablet characteristics. It was concluded that the hot-melt extrusion technique can be utilized for the manufacturing of DH sustained release tablets with improved tablet integrity and characteristics by co-processing the tablet excipient with DH/C-888.