The purpose of this study is to evaluate the applicability of solid dispersions prepared with hydroxypropyl cellulose (HPC). Solid dispersions were prepared with sulindac, a poorly water-soluble drug, and HPC of three different molecular weights using a hot melt extrusion method. Physicochemical properties of the solid dispersions were characterized by powder X-ray diffraction (PXRD), differential scanning calorimetry (DSC), and solubility studies. Permeability of sulindac was evaluated using the Caco-2 cell monolayer model. The results obtained by PXRD, DSC, and solubility studies showed that sulindac in the extrudate of sulindac/HPC (20/80 w/w) was completely amorphized and demonstrated better solubility than the drug alone. Permeability of sulindac across Caco-2 cell monolayers remarkably increased when the drug was solid-dispersed with the lowest molecular weight form of HPC (HPC-SSL). It has been concluded that HPC-SSL can be the most effective excipient in order to improve solubility and membrane permeability.