The dissolution or melting of a crystalline drug into a molten polymeric matrix underpins the fabrication of a number of drug delivery systems. However, little is known about how crystals dissolve in such viscous matrices. Herein, the heat-induced dissolution of indomethacin crystals into a molten polymer, copovidone, was evaluated, probing changes in crystal features at multiple length scales using various microscopy techniques. Diffusion of the drug into the polymer film was observed by elemental composition analysis (scanning electron microscopy with energydispersive X-ray analysis). Under polarized light microscopy, irregular dissolution patterns were observed, in which channels and holes were seen forming in the crystals, which then resulted in fragmentation. At shorter length scales by scanning and transmission electron microscopy, crystals demonstrated a range of channel formation and fragmentation behaviors. Defect sites intrinsic to the bulk crystals were hypothesized to be the origin of the dissolution-induced fragmentation process. A defect site-driven dissolution and fragmentation model was thus proposed. A Monte Carlo simulation of crystal dissolution under a range of surface energy configurations is also presented. This study has implications for modeling and understanding of dissolution kinetics and pathways of organic crystals in the context of processing operations such as hot melt extrusion.