Lipid based formulations (LBF) provide well proven opportunities to enhance the oral absorption of drugs and drug candidates that sit close to, or beyond, the boundaries of Lipinski's ‘rule-of-five’ chemical space. Advantages in permeability, efflux and presystemic metabolism are evident; however, the primary benefit is in increases in dissolution and apparent intestinal solubility for lipophilic, poorly water soluble drugs. This review firstly details the inherent advantages of LBF, their general properties and classification, and provides a brief retrospective assessment of the development of LBF over the past fifty years. More detailed analysis of the ability of LBF to promote intestinal solubilisation, supersaturation and absorption is then provided alongside review of the methods employed to assess formulation performance. Critical review of the ability of simple dispersion and more complex in vitro digestion methods to predict formulation performance subsequently reveals marked differences in the correlative ability of in vitro tests, depending on the properties of the drug involved. Notably, for highly permeable low melting drugs e.g. fenofibrate, LBF appear to provide significant benefit in all cases, and sustained ongoing solubilisation may not be required. In other cases, and particularly for higher melting point drugs such as danazol, where re-dissolution of crystalline precipitate drug is likely to be slow, correlations with ongoing solubilisation and supersaturation are more evident. In spite of their potential benefits, one limitation to broader use of LBF is low drug solubility in the excipients employed to generate formulations. Techniques to increase drug lipophilicity and lipid solubility are therefore explored, and in particular those methods that provide for temporary enhancement including lipophilic ionic liquid and prodrug technologies. The transient nature of these lipophilicity increases enhances lipid solubility and LBF viability, but precludes enduring effects on receptor promiscuity and off target toxicity. Finally, recent efforts to generate solid LBF are briefly described as a means to circumvent the need to encapsulate in soft or hard gelatin capsules, although the latter remain popular with consumers and a proven means of LBF delivery.