The objective of the present study was to improve the dissolution rate of Modafinil by solid dispersion (SD) systems in PVP-K 30. Drug contents were determined by UV Spectrophotometry at λmax of 259.5 nm. The phase solubility behavior of Modafinil in presence of various concentrations of carriers in distilled water was obtained at 37±2°C. The dissolution of Modafinil increased with increasing amount of carriers. Gibbs free energy (G°tr) values were all negative, indicating the spontaneous nature of Modafinil solubilization. The SDs of Modafinil with the carrier was prepared at 1:1, 1:3 and 1:5 (Modafinil: carrier) ratio by lyophilization method. The FTIR spectroscopic studies and Differential Scanning Calorimetry (DSC) showed the stability of Modafinil and absence of well-defined drug polymer interaction. The dissolution rate increases with increasing the ratio of PVP-K 30.