The present invention relates to a process for preparing submicron sized nanoparticles of a poorly water soluble compound by lyophilizing a dispersion or microdispersion of a multiphase system having an organic phase and an aqueous phase, the organic phase having the poorly water soluble organic compound therein. The method is preferably used to prepare nanoparticles of a poorly water soluble, pharmaceutically active compound suitable for in vivo delivery, particularly by parenteral routes.