Partition coefficient (log P) is a key physicochemical characteristic of lipophilic drugs which plays a significant role in formulation development for oral administration. Lipid-based formulation strategies can increase lymphatic transport of these drugs and can enhance bioavailability many folds. The number of lipophilic drugs in pharmacopoeias and under discovery are continuously increasing and making the job of the formulation scientist difficult to develop suitable formulation of these drugs due to potent nature and water insolubility of these drugs. Recently, many natural and synthetic lipids are appearing in the market which are helpful in the development of lipid-based formulations of these types of drugs having enhanced solubility and bioavailability. One such reason for this enhanced bioavailability is the accessibility of the lymphatic transport as well as avoidance of first-pass effect. This review discusses the impact of lipophilicity in enhancing the intestinal lymphatic drug transport thereby reducing first-pass metabolism. The most appropriate strategy for developing a lipid-based formulation depending upon the degree of lipophilicity has been critically discussed and provides information on how to develop optimum formulation. Various formulation strategies are discussed in-depth by classifying lipid-based oral drug delivery systems with case studies of few marketed formulations with challenges and opportunities for the future of the formulations.