Leflunomide is a drug with limited water solubility. It exhibits four polymorphic forms I,II,III,IV. In the present study, form II polymorph was formulated using form I. Form II polymorph readily dissolves in water than does form I. The crystals of form I and II polymorph were characterized by IR, DSC, XRPD. Comparison of solubility of form I and form II was done by UV Spectrophotometer. There was a significant increase in solubility of form II. Aqueous film-coated tablets of form I and form II were prepared using the same processing parameters and compared for the rate of dissolution. Form II tablets showed a significant improvement in terms of dissolution rate, drug release and solubility.