Large number of drugs; including new chemical entity (NCE), are facing the solubility problem [classified as biopharmaceutical classification system (BCS) Class II or IV]. Hence extensive development in solubility enhancement is required. Hot melt extrusion (HME) is the most widely applied processing techniques useful for preparing granules, pellets, sustained release tablets, implants, transdermal and transmucosal drug delivery systems ,while its major advantages include enhancement of the dissolution rate and bioavailability, controlling or modifying drug release, taste masking, stabilizing the active pharmaceutical ingredient (API). Hot melt extruded dosage forms are generally complex mixtures of API, plastisizers and polymer carriers which are passed through single or twin-screw extruders at high temperature and stress, molten thermoplastic polymers during the extrusion process can function as thermal binders and/or release retardants. Present investigation deals with enhancement of dissolution rate and hence solubility of Efavirenz (Efv), which belongs to BCS class II. Efv is non neucleotide reverse transcriptase inhibitor (NNRTI) for first line antiretroviral treatment type 1 with long half life of 52-56 hrs. Solubility enhancement techniques are available in wide range but HME was the preferred technique due to its several advantages. Copovidone (Kollidon VA64) as polymer and polyethylene glycol (PEG 4000), polyoxy 35 castor oil (Cremophor EL) and sorbiton monolaurate (Montane 20 PHA) as plasticizers were studied and optimized. Evaluation techniques like saturation solubility, effect of temperature on preparation of complexes, differential scanning calorimetry (DSC), x-ray diffraction (XRD), Infra red (IR), dissolution and in vitro permeability studies were carried out. XRD data concluded that HME process demolished the sharp peaks of Efv which indicate the complete conversion of crystal form of Efv to amorphous form. Dissolution and solubility studies also showed enhancement in release rate of HME complex. Stability studies at 40 º C/75 % RH (relative humidity) were studied and it shows that the sample is stable even after 3 months study. HME is simple and efficient method to improve dissolution and permeability of poorly water soluble Efv.