This review aims to provide a thorough examination of the benefits, challenges, and advancements in utilizing lipids for more effective drug delivery, ultimately contributing to the development of innovative approaches in pharmaceutical science. Lipophilic drugs, characterized by low aqueous solubility, present a formidable challenge in achieving effective delivery and absorption within the human body. To address this issue, one promising approach involves harnessing the potential of lipids. Lipids, in their diverse forms, serve as carriers, leveraging their unique capacity to enhance solubility, stability, and absorption of these challenging drugs. By facilitating improved intestinal solubility and selective lymphatic absorption of porously permeable drugs, lipids offer an array of possibilities for drug delivery. This versatile characteristic not only bolsters the pharmacological efficacy of drugs with low bioavailability but also contributes to enhanced therapeutic performance, ultimately reducing the required dose size and associated costs. This comprehensive review delves into the strategic formulation approaches that employ lipids as carriers to ameliorate drug solubility and bioavailability. Emphasis is placed on the critical considerations of lipid type, composition, and processing techniques when designing lipid-based formulations. This review meticulously examines the multifaceted challenges that come hand in hand with lipid-based formulations for lipophilic drugs, offering an insightful perspective on future trends. Regulatory considerations and the broad spectrum of potential applications are also thoughtfully discussed. In summary, this review presents a valuable repository of insights into the effective utilization of lipids as carriers, all aimed at elevating the bioavailability of lipophilic drugs.