In the present study, an attempt was made to study enhancement of bioavailability of azithromycin, sparingly water soluble macrolide antibiotic, by use of solid dispersion technique, using 1:1 and 1:2 w/w ratios of three carriers- poloxamer 188, poloxamer 407 and polyethylene glycol 20,000. Two methods were used to prepare solid dispersions - solvent evaporation and freeze drying/lyophilisation. Drug – excipient incompatibilities were studied using Fourier transform Infra red spectroscopy and Differential scanning calorimetry. IR spectra did not show any significant changes in characteristic peaks of pure drug and excipients. DSC thermograms showed characteristic endothermic peaks at respective melting points of pure drug and excipients, thus ruling out of any undesirable interactions. Drug contentof all prepared 12 solid dispersions was found to be satisfactory. Prepared solid dispersions were characterised using In-Vitro dissolution studies, kinetic modelling patterns, Scanning electron microscopy images and X Ray Diffractograms. . From the in vitro drug release profile, it could be observed that, formulation FSD2 (prepared using freeze drying method with Poloxamer 188) drug release was 88.71%,FSD6 (prepared by freeze drying method with PEG 20,000) drug release was found to be 87.14%, FSD1 (prepared by freeze drying method with Poloxamer 188) drug release was found to be 86.87%, ESD2 (prepared by solvent evaporation method with Poloxamer 188)drug release was found to be 87.5% .From the kinetics, it could be possibly stated that the release from the matrix was through diffusion. The XRD pattern depicted by solid dispersions reveals a decrease in the number of 2θ peaks which probably represents decrease in crystallinity. SEM images also showed the nature of particles to be highly porous. Thus, it can be concluded that, solid dispersion technique using freeze drying method, and carriers such as poloxamers has proven to be highly effective to improve bioavailability of poorly water-soluble drugs.