The oral delivery of poor water soluble drug candidate is a major challenge because of the low aqueous solubility and less bioavailability. Lipid based drug delivery system such as self emulsifying drug delivery system (SEDDS) is isotropic mixtures of oils, surfactants and hydrophilic co-solvents/surfactants. These formulations are designed to improve the oral absorption of highly lipophilic drug compounds. Mostly as per biopharmaceutical classification system (BCS), class II drug and class IV are formulated as lipid based formulations. SEDDS is used to formulate formulation containing hydrophobic drug in solubilized form which enhances oral absorption and bioavailability of drug. SEDDS comprises of a mixture of oil surfactant, co-surfactant which act as a carrier for drugs by forming emulsion under gentle stirring when diluted in water or physiological media with physiological motion. A pseudo ternary phase diagram is used for identifying emulsification region. The fact 40% of the new drug compounds are hydrophobic in nature implies that studies with SEDDS will continue, and more drug formulated as SEDDS will reach the pharmaceutical market in the future.