Three solid state forms of stavudine designated forms I, II and III have been identified and characterized. Forms I and II are anhydrous polymorphs whereas form III is hydrated and is pseudopolymorphic with forms I and II. Physico-chemical and thermodynamic properties of the three solid state forms have been characterized. Solid-state stability and potential for interconversion of the forms to aid in the selection of preferred form for development and commercialization has been studied. Conditions of recrystallization governing the formation of thermodynamically most stable polymorphic form I devoid of other forms was identified.