The majority of newly discovered oral drugs are poorly water soluble, and co-administration with lipids has proven effective in significantly enhancing bioavailability of some compounds with low aqueous solubility. Yet, lipid-based delivery technologies have not been widely employed in commercial oral products. Lipids can impact drug transport and fate in the gastrointestinal (GI) tract through multiple mechanisms including enhancement of solubility and dissolution kinetics, enhancement of permeation through the intestinal mucosa, and triggering drug precipitation upon lipid emulsion depletion (e.g., by digestion). The effect of lipids on drug absorption is currently not quantitatively predictable, in part due to the multiple complex dynamic processes that can be impacted by lipids. Quantitative mechanistic analysis of the processes significant to lipid system function and overall impact on drug absorption can aid in the understanding of drug-lipid interactions in the GI tract and exploitation of such interactions to achieve optimal lipid-based drug delivery. In this review, we discuss the impact of co-delivered lipids and lipid digestion on drug dissolution, partitioning, and absorption in the context of the experimental tools and associated kinetic expressions used to study and model these processes. The potential benefit of a systems-based consideration of the concurrent multiple dynamic processes occurring upon co-dosing lipids and drugs to predict the impact of lipids on drug absorption and enable rational design of lipid-based delivery systems is presented.