The limited solubility of clarithromycin (CAM), coupled with low bioavailability and rapid elimination, are major shortcomings, needed to be addressed to achieve optimum therapeutic goals. Therefore, sustained-release (SR) tablets containing solid dispersion (SD) granules of CAM were prepared in this study. Initially, SD granules of CAM were prepared by hot melt extrusion (HME) technique using Kollidon VA64 as a hydrophilic carrier. The saturation solubility of SD showed almost 4.5-fold increase as compared to pure CAM in pH 6.8 medium. In vitro drug dissolution data indicated a substantial increase in the dissolution of SD as compared to that of pure CAM. The thermal stability of drug, carrier, and SD at elevated HME temperatures was evident from the results of thermogravimetric analysis (TGA) and differential scanning calorimetry (DSC). Powder X-ray diffraction (PXRD) data and scanning electron microscope (SEM) images revealed a decrease in the crystallinity and the uniform dispersion of drug, respectively. Moreover, Fourier transformed infrared spectroscopy (FT-IR) data confirmed the formation of hydrogen bond between the carbonyl group of drug and the hydroxyl group of carrier. SD loaded sustained-release (SD-SR) matrix tablets were prepared with hydrophobic polymers (Eudragit RS100 and Eudragit RL100). The pH-independent swelling and permeability of both polymers were responsible for the sustained drug release from SD-SR tablets. Pharmacokinetic (PK) studies suggested a 3.4-fold increase in the relative bioavailability of SD-SR tablets as compared to that of pure CAM.