In this study, optimized freeze-dried finasteride nanoparticles (NPs) were prepared from drug nanosuspension formulation that was developed using the bottom-up technique. The effects of four formulation and processing variables that affect the particle size and solubility enhancement of the NPs were explored using the response surface optimization design. The optimized formulation was morphologically characterized using transmission electron microscopy (TEM). Physicochemical interaction among the studied components was investigated. Crystalline change was investigated using X-ray powder diffraction (XRPD). Crystal growth of the freeze-dried NPs was compared to the corresponding aqueous drug nanosuspension. Freeze-dried NPs formulation was subsequently loaded into hard gelatin capsules that were examined for in vitro dissolution and pharmacokinetic behavior. Results revealed that in most of the studied variables, some of the quadratic and interaction effects had a significant effect on the studied responses. TEM image illustrated homogeneity and shape of the prepared NPs. No interaction among components was noticed. XRPD confirmed crystalline state change in the optimized NPs. An enhancement in the dissolution rate of more than 2.5 times from capsules filled with optimum drug NPs, when compared to capsules filled with pure drug, was obtained. Crystal growth, due to Ostwald ripening phenomenon and positive Gibbs free energy, was reduced following lyophilization of the nanosuspension formulation. Pharmacokinetic parameters from drug NPs were superior to that of pure drug and drug microparticles. In conclusion, freeze-dried NPs based on drug nanosuspension formulation is a successful technique in enhancing stability, solubility, and in vitro dissolution of poorly water-soluble drugs with possible impact on the drug bioavailability.