The present study aimed to develop and evaluate sustained release formulations of Lansoprazole capsules using solid dispersion and formalin-treated gelatin capsules to enhance solubility and achieve controlled drug delivery. Preformulation studies, including organoleptic characterization, solubility testing, and FTIR analysis, confirmed the drug’s poor aqueous solubility, stability, and compatibility with selected excipients. Solid dispersions were prepared by solvent evaporation employing hydrophilic polymers (PVP K30, PEG 6000, and Poloxamer 407) in varying ratios, which significantly improved dissolution behavior. Formalin-treated gelatin capsules were designed to modulate capsule solubility and delay initial drug release. Final sustained release formulations incorporated hydroxypropyl methylcellulose (HPMC, grades 4K and 100K) and sodium CMC as release modifiers. Physicochemical evaluation showed uniform weight, acceptable assay values, and intact capsule structure. In-vitro dissolution studies revealed extended drug release with polymer- and treatment-dependent variations. Formulations containing high-viscosity HPMC exhibited superior release control, fitting well to zero-order, Higuchi, and Korsmeyer–Peppas kinetic models, indicating a predominantly diffusion-controlled mechanism. FTIR confirmed the absence of drug–excipient interactions, ensuring formulation stability. Overall, the study demonstrates that combining solid dispersion with formalin-treated gelatin capsules is a promising approach for improving solubility and sustaining the release of Lansoprazole, thereby potentially enhancing therapeutic efficacy, reducing dosing frequency, and improving patient compliance in acid-related disorders.