Background: Digoxin (DGX) is a narrow therapeutic index (NTI) and Biopharmaceutics Classification System (BCS) class IV drug whose clinical performance can be influenced by physicochemical properties, formulation composition, manufacturing processes, and stability-related solid-state transformations. Objective: The objective of the paper was to understand the effect of process and formulation variables on digoxin formulations. Methods: This study reports the effect of particle size, lactose types (LA and LM), manufacturing methods, and granulating fluid (ethanol and water–ethanol) on the critical quality attributes of DGX tablets (XRPD, DT, assay, impurity, and dissolution). Accordingly, 10 formulations were prepared using a full factorial design and monitored for 30 days at 40 °C/75% RH. Results: Assay values of the formulations did not change significantly (p > 0.05) compared to initial values after storage. No impurities or new peaks were detected in the stability samples, indicating either no drug degradation or the degradation products were below the limit of detection of the method (31.5–44.6 ng/mL). The dissolution rate and extent of the formulations changed after exposure, indicating the effect of composition and process variables. In direct compression formulations, a decrease in dissolution rate, especially at 10 and 20 min, was higher than at 60 min, which may be related to an increase in hardness and DT values. However, a decrease in dissolution of 5.6–8.7% at 60 min was observed after storage from the initial values, which may be due to an increase in crystallinity. Conclusions: Particle size, manufacturing method, and granulating fluid significantly influenced the solid-state characteristics and dissolution performance of DGX tablets. Wet granulation promoted partial amorphization and improved initial dissolution but reduced stability due to recrystallization during storage. These findings highlight the importance of formulation and process selection in ensuring the quality and stability of NTI drug products.