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Formation of solid dispersions as a means to enhance the dissolution rate of poorly soluble Active pharmaceutical ingredients (APIs) typically employs hydrophilic polymer systems and surfactants. While the utility of the surfactant systems in solubilization is well known, the secondary effects of the same on processing and subsequent physical stability of the solid dispersions needs to be studied further.Physical blends of the poorly soluble API and hydrophilic polymers such as PVP-K30, Plasdone-S630, HPMC-E5, HPMCAS, and Eudragit L100 with mass ratio 1:1 were prepared. The surfactants tested in this study included Tween-80, Docusate sodium, Myrj-52, Pluronic-F68 and SLS. Thermal analysis of the API–polymer–surfactant blends suggested that the surfactants caused solvation/plasticization, manifesting in reduction of (i) the melting (Tm) of API (ii) Tg of the polymers and (iii) the combined Tg of the solid dispersion formed from quench cooling. Explanation of these effects of surfactants is attempted based on their physical state (at the temperature of interest), HLB values and similarity of their solubility parameter values with respect to drug–polymer systems.Furthermore, extruded matrices containing different API–polymer (PVP-K30, Plasdone-S630, and HPMC-E5) mixtures prepared with and without surfactants, were produced by feeding the powder blend through a hot-melt extruder. The melt viscosity of the polymer blends was assessed by torque rheometry using a Haake Rheomix. The physicochemical properties of the extruded API–polymer–surfactant were characterized by differential scanning calorimetry, X-ray diffraction, Raman spectroscopy, and polarized microscopy. The results demonstrated that the glass transition temperature of the carrier polymers decreased as direct result of the surfactants in the extrudate, due to an increase in the chain mobility of polymers. A decrease in the melt viscosity was seen due to a plasticization of the polymer. The drug release profiles of the extruded solid dispersions containing intra granular surfactants were found to fit the dispersions with extra granularly added surfactants.