The aim of the present study was to enhance the dissolution rate of meloxicam (MLX), a practically water-insoluble drug by preparation of solid dispersion using a hydrophilic polymer, poloxamer 188 (PXM). The kneading technique was used to prepare solid dispersions. A 3(2) full factorial design approach was used for optimization wherein the drug, polymer ratio (X1), and the kneading time (X2) were selected as independent variables and the dissolution efficiency at 60 min (%DE60) and yield percent were selected as the dependent variable. Multiple linear regression analysis revealed that for obtaining higher dissolution of MLX from PXM solid dispersions, a high level of X1 and a high level of X2 were suitable. The use of a factorial design approach helped in optimization of the preparation and formulation of solid dispersion. The optimized formula was characterized by solubility studies, angle of repose, and contact angle; Fourier transform infrared spectroscopy, differential scanning calorimetry, x-ray diffraction studies, and scanning electron microscopy demonstrated that enhanced dissolution of MLX from solid dispersion might be due to a decrease in the crystallinity of MLX and PXM. Analysis of dissolution data of optimized formula indicated the best fitting with Korsemeyer-Peppas model and the drug release kinetics as Fickian diffusion. In conclusion, dissolution enhancement of MLX was obtained by preparing its solid dispersion with PXM using kneading technique.