Solid dispersions are one of the most effective methods for improving the dissolution rate of poorly water-soluble drugs; however, this is reliant on the selection of a suitable carrier and solvent. The present study is the mechanistic evaluation of the changes in polymorphic form of carbamazepine when the type of solvent and the concentration of D-gluconolactone (D-GL) change. The studies reported herein also explore the use of D-GL as a potential hydrophilic carrier to improve the dissolution rate of a poorly water-soluble drug, carbamazepine (CBZ), from physical mixtures and solid dispersion formulations. The effect of using different solvents in the preparation of solid dispersion formulations was also investigated. Different ratios of solid dispersions of the drug and D-GL were prepared using a conventional solvent evaporation method. Different solvents (ethanol, acetone and water) were used as a second experimental variable in the preparation of solid dispersions. Physical mixtures of CBZ and D-GL were also prepared for comparison. The results showed that the presence of D-GL can increase the dissolution rate of CBZ compared to pure CBZ. This study showed that D-GL could be used as a new carrier in solid dispersion formulations and physical mixtures. The interesting solid state behaviour of CBZ in all solid dispersions in the presence of D-GL was fully analyzed using Fourier-transform infrared (FT-IR), X-ray powder diffraction (XRPD), scanning electron microscope (SEM), hot stage microscopy (HSM) and differential scanning calorimetry (DSC). The results showed that depending on the type of solvent and concentration of D-GL used in the preparation of solid dispersions different forms of CBZ (Form I, Form III and dihydrate) can be existed in the formulations. (C) 2015 The Institution of Chemical Engineers. Published by Elsevier B.V. All rights reserved.