Poly(ethylene oxide) (PEO) was tested as a polymer matrix for solid dispersion to enhance drug bioavailability. Solid state nuclear magnetic resonance (NMR), X-ray diffraction (XRD), and transmission electron microscopy (TEM) were utilized to characterize the high miscibility between PEO and ketoprofen, a model for crystalline drugs with poor water solubility. The experimental data demonstrated that ketoprofen in the melt-processed blend formed a complete molecular dispersion within the amorphous domain of PEO, resulting in high molecular mobility of ketoprofen in the melt-processed blend that leads to enhanced dissolution rate of ketoprofen in aqueous media. Hydrogen bonds between the carboxylic group of ketoprofen and the ether oxygen of PEO, as detected by solid-state NMR, are the likely source for the high miscibility between ketoprofen and PEO. Such drug/polymer molecular interactions promote dispersion of ketoprofen into amorphous phase of PEO at temperatures well below melting points of both crystalline ketoprofen and PEO. Consequently, melt-processing temperatures can be reduced significantly to avoid thermal degradation. The processing conditions can be also flexible while maintaining reproducibility of the physico-chemical properties of the blend. Furthermore, the high degree of drug/polymer molecular interactions stabilizes the morphology of the blend during storage.