Development of techniques to enhance bioavailability of drugs having poor water solubility is a big challenge for pharmaceutical industry. Solubility can be enhanced by particle size reduction and encapsulation using hydrophilic polymers. Fenofibrate (FF) is a drug for regulating lipids. Multi-fold enhancement in solubility of FF has been achieved by nanocrystal formation in the present study. Nanoparticles were prepared by an evaporation-assisted solvent-antisolvent interaction (EASAI) approach. Water-soluble polymers, viz. polyvinylpyrrolidone (PVP), polyvinyl alcohol (PVA), and hydroxypropyl methylcellulose (HPMC), were used to encapsulate and thus control the particle size of FF nanocrystals. Spherical particles having average particle size well below 30 nm could be prepared under optimum conditions. Almost complete release of the drug molecules from the polymer-stabilized nanocrystals within 2 h was clearly evident from the in vitro drug release studies. Infrared (FTIR) spectroscopy indicated the absence of solvent impurities and any strong interaction between the drug and stabilizers. The polymorphic form of raw-FF was retained in the nanoparticles as per the X-ray diffraction (XRD) patterns. Lower crystallinity of the nanoformulated samples compared to raw-FF was confirmed by differential scanning calorimetric (DSC) studies.