This article is intended to combine recent literature on solid dispersion technology for solubility enhancement with special emphasis on mechanism responsible for the same by solid dispersion, various preparation methods, and evaluation parameters. Solubility behavior is the most challenging aspect for various new chemical entities as 60% of the new potential products possess solubility problems. This is the biggest reason for new drug molecules not reaching to the market or not reaches to full potential. There are various techniques to enhance the drug solubility such as particle size reduction, nanosuspension, use of surfactants, salt formation, solid dispersion, etc. From this article it may be concluded that solid dispersion is an important approach for improvement of bioavailability of poor water-soluble drugs.