Lipid based formulations (LBFs) are a promising formulation strategy for many poorly water-soluble drugs and have been shown previously to enhance the oral exposure of CP-532,623, an oral cholesteryl ester transfer protein inhibitor. In the current study, an in vitro lipid digestion model was used to probe the relationship between drug solubilization and supersaturation on in vitro dispersion and digestion of LBF containing long chain (LC) lipids and drug absorption in vivo. After in vitro digestion of LBF based on LC lipids, the proportion of CP-532,623 maintained in the solubilized state in the aqueous phase of the digest was highest in formulations containing Kolliphor RH 40, and in most cases outperformed equivalent formulations based on MC lipids. Subsequent administration of the LC-LBFs to beagle dogs resulted in reasonable correlation between concentrations of CP-532,623 measured in the aqueous phase of the in vitro digest after 30 min digestion and in vivo exposure (AUC); however, the LC-LBFs required greater in vitro drug solubilization to elicit similar in vivo exposure when compared to previous studies with MC-LBF. Although post digestion solubilization was enhanced in LC-LBF compared to MC-LBF, equilibrium solubility studies of CP-532,623 in the aqueous phase isolated from blank lipid digestion experiments revealed that equilibrium solubility was also higher, and therefore supersaturation lower. A revised correlation based on supersaturation in the digest aqueous phase and drug absorption was therefore generated. A single, linear correlation was evident for both LC- and MC-LBF containing Kolliphor RH 40, but this did not extend to formulations based on other surfactants. The data suggest that solubilization and supersaturation are significant drivers of drug absorption in vivo, and that across formulations with similar formulation composition good correlation is evident between in vitro and in vivo measures. However, across dissimilar formulations, solubilization and supersaturation alone are not sufficient to explain drug exposure and other factors also likely play a role.