The term “liquisolid medication” implies oily liquid drugs and solutions or suspensions of water insoluble drugs carried in suitable non-volatile solvent systems. Liquisolid compacts demonstrated a considerably higher drug dissolution rates than those of conventionally made capsules and directly compressed tablets. This was due to the increased wetting properties and surface of drug available for dissolution. This review paper highlights the application of liquisolid technique to enhance the solubility and dissolution of water insoluble drugs. This technique is appropriate for poorly or water insoluble drugs and also for immediate or sustained release formulations. This review also depicts the various formulation parameters that must be optimized before formulation the liquisolid compacts.