Solid dispersion is one of well-established pharmaceutical techniques to improve the dissolution and consequent bioavailability of poorly water soluble drugs. It is defined as a dispersion of drug in an inert carrier matrix. Solid dispersions can be classified into three generations according to the carrier used in the system. First and second generations consist of crystalline and amorphous substances, respectively. Third generation carriers are surfactant, mixture of polymer and surfactants, and mixture of polymers. Solid dispersions can be generallyprepared by melting method and solvent method. While melting method requires high temperature to melt carrier and dissolve drug, solvent method utilizes solvent to dissolve the components. The improvement in dissolution through solid dispersions is attributed to reduction in drug particle size, improvement in wettability, and/or formation of amorphous state. The primary characteristics of solid dispersions, the presenceof drug in amorphous state, could be determined by differential scanning calorimetry (DSC), powder X-ray diffraction (PXRD), and fourier-transformed infrared spectroscopy (FTIR). In spite of the significant improvement in dissolution by solid dispersion technique, some drawbacks have limited the commercial application of solid dispersions. Thus, further studies should be conducted in a direction to improve the congeniality to commercialization.