The increasing frequency at which poorly soluble new chemical entities are being discovered raises concerns in the pharmaceutical industry about drugability associated with erratic dissolution and low bioavailability of these hydrophobic compounds. Nanonization provides a plausible pharmaceutical basis for enhancing oral bioavailability and therapeutic effectiveness of these compounds by increasing their surface area. This paper surveys methods available to pharmaceutical manufacturing nanoparticles, including wet chemical processes, media milling, high pressure homogenization, gas-phase synthesis, and form-in-place processes, and elaborates physicochemical rational and gastrointestinal physiological basis upon which nano-drugs can be readily absorbed. Relevant examples are illustrated to show that nano-drugs permeate Caco-2 cell monolayer fast and are well absorbed into animal systemic circulation with high Tmax and AUC, resulting in oral bioavailability higher than their counterpart micro-drugs. The size-dependent permeability and bioavailability should be given particular consideration in the development of potent and selective drug candidates with poor aqueous solubility.