In this study, we investigated the effect of manufacturing factors such as particle size, water content and manufacturing method on the physical stability and solubility of solid dispersion formulations of a low-glass-transition-temperature (T(g)) drug. Solid dispersions were prepared from polyvinylpyrrolidone (PVP) and hydroxypropylmethylcellulose (HPMC) by hot melt extrusion or spray drying. Water content of solid dispersions prepared by hot melt extrusion determined by dynamic moisture sorption measurement was increased drastically with relative humidity below a certain level of particle size. The blends with a lower water content (0.8%) prepared by hot melt extrusion during storage were more stable than those with a higher water content (3.5%) prepared by spray drying, which caused rapid recrystallization. Physical stability in the hot melt blends may be attributed to reduced molecular mobility due to a higher T(g). Dissolution study revealed that solid dispersions prepared by hot melt extrusion with the smallest particle size showed decreased solubility, attributed to reduced wetting properties (surface energy), which is not predictable by the Noyes-Whitney equation. Taken together, these results indicate that the control of particle size concerned in water content or wetting properties is critical to ensuring the physical stability or enhancing solubility of low-T(g) drugs. Further, hot melt extrusion, which can reduce water content, is a suitable manufacturing method for solid dispersions of low-T(g) drugs.