To evaluate the potency of hydrolyzed polyvinyl alcohols (PVAs) as matrices for solid dispersion (SD) formulations, we examined their inhibitory effects on precipitation of a poorly water-soluble drug, indomethacin (IND). Additionally, to clarify their mechanism, we investigated the intermolecular interaction of IND with PVAs in the supersaturated aqueous solution of IND. In the present study, we used five kinds of PVAs, i.e. JR-05 (70.0–74.0% hydrolyzed), JL-05E (80.0–84.0% hydrolyzed), JP-05 (87.0–89.0% hydrolyzed), JT-05 (93.5–94.5% hydrolyzed) and JF-05 (98.0–99.0% hydrolyzed). Of various PVAs, the lowly hydrolyzed PVAs such as JR-05 and JL-05E dramatically inhibited the precipitate formation of IND. Interestingly, the lowly hydrolyzed PVAs possessed micelle-forming ability, and inhibited the nucleation and crystal growth of IND. Moreover, strong hydrophobic interactions between vinyl acetate unit of lowly hydrolyzed PVA and hydrophobic moiety of IND were suggested based on the results of nuclear magnetic resonance (1H NMR) and nuclear overhauser effect spectroscopy (NOESY) in deuterium oxide. To the best of our knowledge, this is the first report describing the inhibitory effects of the hydrolyzed degree of PVAs on the precipitation of a drug, and demonstrating the intermolecular interaction between PVAs and a drug using NOESY in water.