Abstract: One of the greatest challenges facing the pharmaceutical industry is the design and development of suitable delivery systems to overcome poor dissolution profile for insoluble drugs. Different formulation approaches including particulate systems, pH alterations and co solvents have been investigated in an attempt to determine the critical formulation parameters to improve dissolution and solubility of poorly soluble drugs. The present study aims to investigate formulation development of solid dispersions for model poorly soluble drug, paracetamol with an overall objective of deciphering drug release mechanisms. Solid dispersions of paracetamol in polyethylene glycol 8000 as a hydrophilic carrier showed that dissolution rate was significantly increased when compared to polymer free formulations and was controlled by the rate of polymer dissolution. The study also showed that polymer to drug ratio was another key factor affecting drug release kinetics. In addition, stability studies were performed according to ICH guidelines. Hyper-differential scanning calorimetry (Hyer-DSC), fourier transform infrared spectroscopy (FTIR), drug content and thermogravimetric analysis (TGA) were carried out as part of the quality assessment criterion during stability studies. The results concluded that solid dispersions of paracetamol were stable at room conditions.