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Poor aqueous solubility impedes a drug's bioavailability and challenges its pharmaceutical development. Pharmaceutical development of drugs with poor water solubility requires the establishment of a suitable formulation layout among various techniques. Various approaches have been investigated extensively to improve the aqueous solubility and poor dissolution rate of BCS class II and IV drugs. In this literature review, novel formulation options, particularly for class II drugs designed for applications such as micronization, self-emulsification, cyclodextrin complexation, co-crystallisation, super critical fluid technology, solubilisation by change in pH, salt formation, co-solvents, melt granulation, and solid dispersion, liposomal/niosomal formulations, are discussed in detail to introduce biopharmaceutical challenges and recent approaches to facilitate more efficient drug formulation and development.