Predictive scientific principles and methods to assess in vivo performance of pharmaceutical dosage forms based on in vitro studies are important in order to minimize costly animal and human experiments during drug development. Because of issues related to poor solubility and low permeability of newer drug candidates, there has in recent years been a special focus on in vitro-in vivo correlation (IV-IVC) of drug products, particularly those used orally. Various physicochemical, biopharmaceutical, and physiological factors that need to be considered in successful IV-IVC of immediate-release oral dosage forms are reviewed in this article. The physicochemical factors include drug solubility in water and physiologically relevant aqueous media, pK(a) and drug ionization characteristics, salt formation, drug diffusion-layer pH, particle size, polymorphism of drug substance, and so forth. The biopharmaceutical factors that need to be considered include effects of drug ionization, partition coefficient, polar surface area, etc., on drug permeability, and some of the physiological factors are gastrointestinal (GI) content, GI pH, GI transit time, etc. Various in silico, in vitro, and in vivo methods of estimating drug permeability and absorption are discussed. Additionally, how IV-IVC may be applied to immediate-release oral dosage form design are presented.