High solubility in water and physiological fluids is an indispensable requirement for the pharmacological efficacy of an active pharmaceutical ingredient. Indeed, it is well established that pharmaceutical substances exhibiting limited solubility in water are inclined towards diminished and inconsistent absorption following oral administration, consequently resulting in variability in therapeutic outcomes. The current advancements in combinatorial chemistry and pharmaceutical design have facilitated the creation of drug candidates characterized by increased lipophilicity, elevated molecular size, and reduced aqueous solubility. Undoubtedly, the issue of poorly water-soluble medications has been progressively escalating over recent years. Indeed, 40% of the top 200 oral medications marketed in the United States, 33% of drugs listed in the US pharmacopoeia, 75% of compounds under development and 90% of new chemical entities are insufficiently water-soluble compounds. In order to address this obstacle, formulation scientists employ a variety of approaches, encompassing both physical and chemical methods such as prodrug synthesis, salt formation, solid dispersions formation, hydrotropic substances utilization, solubilizing agents incorporation, cosolvent addition, polymorphism exploration, cocrystal creation, cyclodextrins complexation, lipid formulations, particle size reduction and nanoformulation techniques. Despite the utilization of these diverse approaches, the primary reason for the failure in new drug development persists as the poor aqueous solubility of pharmaceutical compounds. This paper, therefore, delves into the foundational principles that underpin the implementation of various formulation strategies, along with a discussion on the respective advantages and drawbacks associated with each approach. Additionally, a discourse is provided regarding methodological frameworks for making informed decisions on selecting an appropriate formulation strategy to effectively tackle the key challenges posed during the development of a poorly water-soluble drug candidate.