We use a lattice-based Monte Carlo method presented recently for micellar solubilization (Talsania et al. J. Colloid Interface Sci. 1997, 190, 92) to determine the phase behavior in surfactant-solute-solvent systems and to examine the locus and extent of solubilization of solutes in micelles as a function of the solute hydrophobicity and chain length. A novel method, based on the distribution of solute in clusters of different sizes, is developed to study the phase behavior of the solute in the absence and presence of surfactant. The results obtained from these simulations are compared with estimates based on quasichemical theory to determine the applicability of this theory to micellar systems. Addition of surfactant to a solute-solvent system first leads to a decrease in the solubility of the solutes prior to a subsequent increase at higher surfactant concentrations. An examination of micellar shapes shows that the surfactant studied forms roughly spherical micelles. However, the presence of solute induces coexistence of spherical and oblong micelles.