The solubility and dissolution of famotidine from solid glass dispersions of xylitol, prepared by the fusion method, were investigated. Preliminary stability studies revealed that famotidine was stable for 72 hours (< 0.5% decomposition) in water at 37° ± 0.5° C. Both the drug and the carrier were stable and did not decompose during the fusion process. About 4% decomposition of famotidine was observed after 72 hours in an aqueous solution of famotidine:xylitol glass dispersion at 37° ± 0.5° C. Solubility of famotidine from solid glass dispersions and physical mixtures with famotidine:xylitol ratios of 1:1, 1:20 and 1:40 was studied at 37° ± 0.5° C and found to be higher than that of famotidine alone in water. The solubility of famotidine from physical mixtures increased linearly with the increase in xylitol concentration, but the relationship was not linear for glass dispersions. The dispersions were more effective in enhancing the solubility of famotidine as compared to physical mixtures of corresponding drug:carrier ratios. A 1:40 glass dispersion increased the solubility by up to 32% while the solubility increase from a 1:40 physical mixture was 14%. Dissolution studies were carried out on glass dispersions with famotidine:xylitol ratios of 1:1, 1:10 and 1:20 in water at 37° ± 0.5° C. Results revealed a marked increase in the dissolution rate of famotidine from solid glass dispersions when compared to the dissolution rate of plain famotidine powder alone. The increase was greatest at the lowest drug level (1:20 drug:carrier ratio) with 100% of the drug dissolving within one minute. The glass dispersions were subjected to thermal analysis. Thermograms obtained by differential scanning calorimetry showed no evidence of chemical interaction between famotidine and xylitol. Phase diagrams were constructed for famotidine:xylitol solid glass dispersions and physical mixtures from melting temperatures determined by the capacity tube method. The phase diagram of the dispersion system suggested the formation of a eutectic mixture of famotidine and xylitol near a drug:carrier ratio of 1:40.