Purpose <p>As research on gels continues to advance, pharmaceutical small-molecule hydrogels have attracted growing interest in formulation development. This study addressed two key questions: whether small-molecule hydrogels could function as an effective solubilization strategy and how to design such hydrogel systems.</p> Methods <p>Sulindac (SUL), a non-steroidal anti-inflammatory drug, is subject to significant limitations in clinical use owing to its low aqueous solubility. Herein, SUL-based small-molecule hydrogel systems were fabricated by simply mixing SUL with biocompatible amino acids in a small volume of deionized water. This study combined theoretical miscibility calculation, molecular dynamics simulation, and experimental verification (preparation, characterization, <i>in vitro</i> solubility and release assessments, etc.) to explore their formation and solubilization mechanisms.</p> Results <p>The formed SUL hydrogels with arginine (ARG) or lysine (LYS) exhibited characteristic three-dimensional network structures and excellent viscoelastic properties. Combined results from characterization analyses and molecular simulations revealed that hydrogel formation was promoted by three factors: favorable miscibility between SUL and ARG/LYS, a dissolution-aggregation equilibrium, and self-assembly driven by intermolecular interactions. Compared to pure SUL, the solubility of SUL in both hydrogels was enhanced more than 500-fold. Additionally, the novel SUL hydrogels demonstrated superior release kinetics and supersaturation capacity, characterized by rapid achievement of peak concentrations and sustained supersaturated release. These performances were attributed to the high-energy state of the hydrogels themselves and the complexation between SUL and ARG/LYS.</p> Conclusions <p>This study presents a viable formulation approach for overcoming the poor water solubility of insoluble drugs through the design of small-molecule hydrogel formulations.</p> Graphical Abstract <p></p>