Nanosizing is an advanced formulation approach to address the issues of poor aqueous solubility of active pharmaceutical ingredients. Here we present a procedure to prepare a nanoparticulate formulation with the objective to enhance dissolution kinetics of taxifolin dihydrate, a naturally occurring flavonoid with antioxidant, anti-inflammatory, and hepatoprotective activities. Polyvinylpirrolidone was selected as a carrier and the solid nanodispersions of varying compositions were prepared by a co-precipitation technique followed by lyophilization. The formulation technology reported herein resulted in aggregate-free, spherical particles with the mean size of about 150 nm, as observed by scanning electron microscopy and measured by photon correlation spectroscopy. Furthermore, the co-precipitation process caused taxifolin dihydrate to convert into an amorphous form as verified by X-ray powder diffraction, differential scanning calorimetry, hot stage microscopy and Raman spectroscopy. Finally, in vitro dissolution behavior of the nanodispersion of taxifolin was shown to be superior to that of either pure drug or a drug-polymer physical mixture, reaching 90% of taxifolin released after 30 min. Such enhanced drug release kinetics from the nanodispersion was attributed to both the reduced particle size and the loss of crystallinity.