Drugs that are poorly soluble in water can be solubilized by the addition of hydrotropes. Albeit known for almost a century, how they work at a molecular basis is still controversial due to the lack of a rigorous theoretical basis. To clear up this situation, a combination of experimental data and Fluctuation Theory of Solutions (FTS) has been employed; information on the interactions between all the molecular species present in the solution has been evaluated directly. FTS has identified two major factors of hydrotrope-induced solubilization: preferential hydrotrope-solute interaction and water activity depression. The former is dominated by hydrotrope-solute association, and the latter is enhanced by ionic dissociation and hindered by the self-aggregation of the hydrotropes. Moreover, in stark contrast to previous hypotheses, neither the change of solute hydration nor the water structure accounts for hydrotropy. Indeed, the rigorous FTS poses serious doubts over the other common hypothesis: self-aggregation of the hydrotrope hinders, rather than promotes, solubilization.