Gefitinib is a tyrosine kinase inhibitor that is intended for oral administration yet suffers poor bioavailability along with undesirable side effects. To enhance its solubility and allow colon targeting, gefitinib (ZD) and blends of different ratios of polymers (ternary dispersion) were prepared in organic solution, and solid dispersions were generated employing the spray drying (SD) technique. The methylmethacrylate polymer Eudragit S 100 was incorporated for colon targeting; polyvinylpyrrolidone (PVP) and hydroxypropyl methyl cellulose (HPMC) were utilised to improve the solubility of ZD. SEM, DSC, XRPD, FT-IR, dissolution and cytotoxicity studies were undertaken to characterise and evaluate the developed formulations. SEM images revealed that the rod-shaped crystals of ZD were transformed into collapsed spheres with smaller particle size in the spray-dried particles. DSC, FTIR and XRPD studies showed that ZD loaded in the spray-dried dispersions was amorphous. ZD dissolution and release studies revealed that while a significant (P < 0.05) increase in the ZD dissolution and release was observed from HPMC-based solid dispersion at pH 7.2 (up to 95% in 15 h), practically no drug was released at pH 1.2 and pH 6.5. Furthermore, the HPMC-based solid dispersions displayed enhanced mucoadhesive properties compared with PVP-based ones. Interestingly, cell viability studies using the neutral red assay showed that PVP and HPMC-based solid dispersions had no additional inhibitory effect on Caco-2 cell line compared to the pure drug.