Administered drug molecules, whether dissolved or solubilized, have the potential to precipitate and accumulate as solid forms in tissues and cells within the body. This phase transition can significantly impact the pharmacokinetics of treatment. It is thus crucial to gain an understanding of how drug solubility/permeability, drug formulations and routes of administration affect in vivo behaviors of drug deposition. This review examines literature reports on the drug deposition in tissues and cells of poorly water-soluble drugs, as well as underlying physical mechanisms that lead to precipitation. Our work particularly highlights drug deposition in macrophages and the subcellular fate of precipitated drugs. We also propose a tissue permeability-based classification framework to evaluate precipitation potentials of poorly soluble drugs in major organs and tissues. The impact on pharmacokinetics is further discussed and needs to be considered in developing drug delivery systems. Finally, bioimaging techniques that are used to examine aggregated states and the intracellular trafficking of absorbed drugs are summarized.