The purpose of this study was to enhance the solubility and bioavailability of carbamazepine (CBZ) through complexation with 2-hydroxypropyl beta-cyclodextrin (HPbetaCD). CBZ is a poorly water soluble antiepileptic drug. Reportedly, it has slow, erratic, and complete absorption after oral administration. This present report describes the study of the phase solubility diagram, preparation of the inclusion complex, characterization of the physico-chemical properties of the complex, and determination of the bioavailability of the complex after oral administration in rats. An A(L)-type phase solubility diagram indicated a 1:1 complex of CBZ-HPbetaCD with the constant of complex formation of 665 M-1 at 37-degrees-C. The complex formation was confirmed by DSC, IR, and X-ray diffraction. The extent of absorption of the complex was determined in rats and was compared with that of pure drug. The peak plasma concentration of 21.4 +/- 4.9 mug/ml of CBZ (C(max)) appeared at 1.55 +/- 0.19 h, whereas with pure drug the value was 10.7 +/- 0.21 mug/ml at 3.98 +/- 0.29 h. The AUC012 of the complex was 2.09 times as much as that of the pure drug. There was no change in the elimination rate constant (0.44 +/- 0.049 h-1). Thus, the extent of oral absorption is improved significantly from the inclusion complex.