Formulation of poorly water-soluble drugs in the most stable dosage form for oral delivery perhaps presents the greatest challenge to pharmaceutical industry. Physical transformation of drug substance into its more soluble but metastable amorphous form is one of the approaches for improving dissolution rate of such drugs. The present study utilizes technique of spray drying for preparation of solid dispersions (SDs) and includes stability study of the same. Valdecoxib (VLD), a prototype of poorly water-soluble drugs, has been the drug of choice. The hydrophilic carriers selected were polyvinylpyrrolidone K30 (PVP) and hydroxypropylcellulose (HPC). SDs and pure VLD in the form of spray dried powder (SDVLD) in comparison with pure drug and corresponding physical mixtures (PMs) were initially characterized and then subjected to stability testing at ambient temperature and relative humidity up to 3 months. During initial characterization, increase in saturation solubility and dissolution rate was observed in all samples. DSC and XRPD studies of SDVLD and SDs suggested generation of amorphous form of drug. IR spectroscopy revealed presence of hydrogen bonding in SDs. During stability testing, there was gradual decrease in saturation solubility and dissolution rate of SDs, over the period of 3 months. While, saturation solubility of SDVLD dropped drastically within 15 days and was almost comparable with pure VLD. SD PVP retained the amorphous form of drug throughout stability period, whereas SD HPC and SDVLD presented incidence of crystallinity after 1 month and 15 days, respectively. This was justified by enthalpy relaxation studies in which, amorphous VLD showed considerable relaxation of enthalpy at Tg, while it was totally suppressed in SD PVP and partly in SD HPC. The study thus definitely reveals tremendous potential of solid dispersions of valdecoxib with PVP, from stability point of view.