Solid dispersions in water-soluble carriers have attracted considerable interest as a means of improving the dissolution rate, and hence possibly bioavailability, of a range of hydrophobic drugs. The aim of the present study was to improve the solubility and dissolution rate of a poorly water-soluble drug, Lovastatin, by a solid dispersion technique. Solid dispersions were prepared by using polyethylene glycol 4000 (PEG 4000) and polyvinylpyrrolidone K30 (PVP K30) in different drug-to-carrier ratios. Dispersions with PEG 4000 were prepared by fusion-cooling and solvent evaporation, whereas dispersions containing PVP K30 were prepared by solvent evaporation technique. These new formulations were characterized in the liquid state by phase solubility studies and in the solid state by differential scanning calorimetry, X-ray powder diffraction, and FT-IR spectroscopy. The aqueous solubility of Lovastatin was favored by the presence of both polymers. The negative values of the Gibbs free energy and enthalpy of transfer explained the spontaneous transfer from pure water to the aqueous polymer environment. Solid-state characterization indicated Lovastatin was present as amorphous material and entrapped in polymer matrix. In contrast to the very slow dissolution rate of pure Lovastatin, the dispersion of the drug in the polymers considerably enhanced the dissolution rate. This can be attributed to improved wettability and dispersibility, as well as decrease of the crystalline and increase of the amorphous fraction of the drug. Solid dispersion prepared with PVP showed the highest improvement in wettability and dissolution rate of Lovastatin. Even physical mixture of Lovastatin prepared with both polymers also showed better dissolution profile than that of pure Lovastatin. Tablets containing solid dispersion prepared with PEG and PVP showed significant improvement in the release profile Lovastatin compared with tablets containing Lovastatin without PEG or PVP.