Cyclodextrins are cyclic oligosaccharides with hydrophilic outer surface and lipophilic centra! cavity able to form inclusion complexes with many lipophilic in water-insolubile drugs. In the solutions drug molecules located in the central cavity are in dynamic equilibrium with free drug molecules. Due to the cyclodextrins size and hydrophilicity only insignificant amounts of cyclodextrins will be able to penetrate across the biological barriers and only free drug will be absorbed. Cyclodextrins are very useful pharmaceutical excipients, able to improve drug solubility and stabi1ity and modify sensory characteristics such as unpleasant taste and smell of the drug. Recently cyclodextrins are used in design of advanced dosage forms. The hydrophylic and ionizable cyclodextrins can serve as potent drug carrieirs in the immedia- • te release- and delayed release - formulations, while the release rate of water-soluble drugs can be retarded by hydrophobic cyclodextrins. The combination of molecular incapsulation with other carrier materials will become effective and valuble tool in the improvement of the drug formulation. Moreover, the most desirable attribute for the drug carrier is its ability to deliver drug to a targeted site: conjugates of a drug with cyclodextrin can be used in colon drug delivery. On the basis of this knowledge, it can be expected that cyclodextrins will play an important role in design of advanced drug formulations.