Poor solubility and bioavailability of drugs are often affected by its microscopic structural properties. Nitrofurantoin (NF), a Biopharmaceutics Classification System class II item, has a low water solubility with low plasma concentrations. To improve its therapeutic efficacy, formulation strategy of solid dispersion (SD) and co-crystallization are compared herein. The co-crystal is prepared with citric acid in 1:1 stoichiometric ratio while SD consists of 30% w/w nitrofurantoin and 70% w/w hydroxypropyl methylcellulose (HPMC) as the carrier system. As a control, the physical mixture of NF and HPMC was prepared. All the preparations were characterized with differential scanning calorimetry (DSC), attenuated total reflectance-Fourier transform infrared spectroscopy (ATR-FTIR), microscopy analysis, solubility, and dissolution studies. The formation of co-crystal, solvent evaporated, and spray-dried SD are confirmed by the ATR-FTIR where peaks shifting of several functional groups indicate the formation of the hydrogen bond. Dissolution studies showed a greater initial dissolution rate in co-crystal than SD despite the possible presence of amorphous content in the SD system. Overall, co-crystal is concluded to be a better approach than SD for an effective dissolution.