Although oral drugs account for 80% of the world drug market, many difficulties arise in their development. The drug absorption profile after oral administration may be influenced by multiple factors, including dosing conditions and physiological state of the gastrointestinal (GI) tract. Variability in GI fluid volume may influence the absorption characteristics. Indeed, the contributions of passive diffusion, transporters, and metabolic enzymes depend on GI drug concentration, which is influenced by changes in GI fluid volume. However, this important variable has been neglected in many prediction methods for oral drug absorption and drug interactions, and for convenience it is often assumed that the GI water volume is fixed at a constant value. Major global regulatory agencies such as the U.S. Food and Drug Administration (FDA), European Medicines Agency (EMA), and Japanese Pharmaceuticals and Medical Devices Agency (PMDA) recommend using a constant fluid volume of 250 mL (the fluid volume of a glass of water) to estimate the theoretical GI concentration of drugs after oral administration. However, the actual volume of water in the GI tract is both time- and site-dependent as a result of water intake, absorption, secretion, and GI transit. This review article summarizes our data showing that luminal water volume is influenced by the osmolality of the applied solution, and illustrates how this effect may contribute to changes in GI drug concentration, resulting in altered drug absorption.