The increasing environmental concerns and regulatory restrictions on toxic conventional solvents have driven the search for sustainable alternatives. Dimethyl isosorbide (DMI), a bio-renewable solvent, has shown potential as a replacement for short-chain glycol ethers, although its use as solvent in liquid chromatography (LC) is underexplored. This study presents a physicochemical characterization of DMI with a particular focus on its application as an innovative solvent in LC analyses. The partition coefficient (log P = −0.44) was determined using the OECD 107 method, and viscosity measurements for DMI and its mixtures with water and ethanol were conducted at 25 °C, 40 °C, and 60 °C. Viscosity ranged from 1.28 mPa·s at 60 °C to 2.62 mPa·s at 40 °C. The Central Composite Face 2³ experimental design for studying the chromatographic behavior of DMI confirmed that 50% (v/v) DMI can be effectively utilized in the mobile phases, at a column temperature of 40 °C, with backpressures ranging from 160 to 300 bar and a UV cut-off at 240 nm. Its effectiveness as an eluent in LC was demonstrated for the quantification of methylparaben and propylparaben in pharmaceutical formulations. This study highlights DMI’s promise as a sustainable bio-renewable alternative to conventional organic solvents used as eluents in LC, supporting eco-friendly practices in pharmaceutical analysis.