Formulation of solid dispersions is one of the effective methods to increase the rate of solubilization and dissolution of poorly soluble drugs. Solid dispersions of chloramphenicol (CP) and sulphamethoxazole (SX) as model drugs were prepared by melt fusion method using polyethylene glycol 8000 (PEG 8000) as an inert carrier. The dissolution rate of CP and SX were rapid from solid dispersions with low drug and high polymer content. Characterization was performed using fourier transform infrared spectroscopy (FTIR), differential scanning calorimetry (DSC) and scanning electron microscopy (SEM). FTIR analysis for the solid dispersions of CP and SX showed that there was no interaction between PEG 8000 and the drugs. Hyper-DSC studies revealed that CP and SX were converted into an amorphous form when formulated as solid dispersion in PEG 8000. Mathematical analysis of the release kinetics demonstrated that drug release from the various formulations followed different mechanisms. Permeability studies demonstrated that both CP and SX when formulated as solid dispersions showed enhanced permeability across Caco-2 cells and CP can be classified as well-absorbed compound when formulated as solid dispersions. © 2013 Informa Healthcare USA, Inc.