The purpose of this work was to develop stable xylitol particles with modified physical properties, improved compactibility and enhanced pharmaceutical performance without altering polymorphic form of xylitol. Xylitol was crystallized using antisolvent crystallization technique in the presence of various hydrophilic polymer additives, i.e., polyethylene glycol (PEG), polyvinylpyrrolidone (PVP) and polyvinyl alcohol (PVA) at a range of concentrations. The crystallization process did not influence the stable polymorphic form or true density of xylitol. However, botryoidal-shaped crystallized xylitols demonstrated different particle morphologies and lower powder bulk and tap densities in comparison to subangular-shaped commercial xylitol. Xylitol crystallized without additive and xylitol crystallized in the presence of PVP or PVA demonstrated significant improvement in hardness of directly compressed tablets; however, such improvement was observed to lesser extent for xylitol crystallized in the presence of PEG. Crystallized xylitols produced enhanced dissolution profiles for indomethacin in comparison to original xylitol. The influence of additive concentration on tablet hardness was dependent on the type of additive, whereas an increased concentration of all additives provided an improvement in the dissolution behavior of indomethacin. Antisolvent crystallization using judiciously selected type and concentration of additive can be a potential approach to prepare xylitol powders with promising physicomechanical and pharmaceutical properties.