The solubility behavior of drug is one of most challenging aspect in formulation development. The purpose of the study was to improve the physicochemical properties of carvedilol like solubility, dissolution properties and stability of poorly soluble drug by forming solid dispersion. Two methods solvent evaporation and fussion methods were employed for the formation of the solid dispersions. Solid dispersions of carvedilol were prepared using combination of two carriers i.e. nicotinamide, polyvinylpyrrolidone (PVP) K30 for the selection of an optimized solid dispersion. The results from the differential scanning calorimetry (DSC), X-ray diffraction patterns (XRD) and scanning electron microscopy (SEM) showed that solid dispersion exist in the amorphous form, hence showed marked increase in the saturation solubility and dissolution rate of carvedilol than that of pure drug. Based on the physical characters and in-vitro drug release pattern, ratio 1:5:3 w/w/w (Drug: nicotinamide: PVP K30) solid dispersion prepared by fusion method, was selected as ideal batch for incorporation in mouth dissolving tablet. The mouth dissolving tablets of carvedilol were prepared by direct compression method. The prepared MDT was evaluated for hardness, friability, weight variation, wetting time, disintegration time and drug content analysis. All these properties were found to be ideal. The in vitro release of carvedilol from its solid dispersion incorporated MDTs was significantly improved when compared to it marketed product.