Dimethyl isosorbide (DMI), which is currently under investigation for its potential use as a pharmaceutical vehicle and drug permeation enhancer, is a water-miscible liquid with relatively low viscosity. The solubilization behavior of DMI as a cosolvent for nonpolar drugs was characterized via dielectric constant measurements of binary solvent systems containing DMI and either water, propylene glycol (PG), or polyethylene glycol (PEG). Evidence from the dielectric constant profiles and NMR studies suggest that DMI undergoes complexation with water and PG, but not with PEG, through hydrogen bonding interactions. The solvent complexation exhibited a major effect on the solubilities of prednisone, dexamethasone, and prednisolone in the mixed solvent systems. Maximum solubility of each drug was found to occur near a DMI/water or DMI/PG concentration ratio of 1:2. In the DMI-PEG mixed system, while there is no apparent interaction between DMI and PEG molecules, the solubility of prednisone was found to increase with decreasing dielectric constant.