During the last few decades the nanomedicine sector has emerged as a feasible and effective solution to the problems faced by the high percentage of poorly water-soluble drugs. Decreasing the size of such drug compounds to the nanoscale can significantly change their physical properties, which lays the foundation for the use of nanomedicine for pharmaceutical applications. Various techniques have been developed to produce poorly water-soluble drug nanoparticles, mainly to address the poor water-soluble issues but also for the efficient and targeted delivery of such drugs. These techniques can be generally categorized into top-down, bottom-up and encapsulation approaches. Among them, the top-down approaches have been the main choice for industrial preparation of drug nanoparticles while other methods are actively investigated by researchers. In this review, we aim to give a comprehensive overview and latest progress of the top-down, bottom-up, and encapsulation methods for the preparation of poorly water-soluble drug nanoparticles and how solvents and additives can be selected for these methods. In addition to the more industrially applied top-down approaches, the review is focused more on bottom-up and encapsulation methods, particularly covering supercritical fluid-related methods, cryogenic techniques, and encapsulation with dendrimers and responsive block copolymers. Some of the approved and mostly used nanodrug formulations on the market are also covered to demonstrate the applications of poorly water-soluble drug nanoparticles. This review is complete with perspectives on the development and challenges of fabrication techniques for more effective nanomedicine.