Docetaxel (DTX) is a chemotherapeutic drug with poor hydrophilicity and permeability. Its lipophilic properties decrease its absorption in systemic circulation which hinders its therapeutic efficacy & safety. Cyclodextrins (CDs) with their unique structural properties enhance solubility of chemotherapeutic drugs. The study was designed to formulate docetaxel-cyclodextrins inclusion complexes for enhancement of solubility with sulfobutyl ether β-cyclodextrin (SBE-β-CD), hydroxypropyl β-cyclodextrin (HP-β-CD) and β-cyclodextrin (β-CD). Further, by using ionic gelation method polymeric nanoparticles of docetaxel-cyclodextrins were prepared with sodium tri poly phosphate (STPP) and chitosan (CS). Optimization is performed by varying CS and STPP mass ratios. Nanoparticles were analyzed for their physicochemical properties, drug-excipient compatibility, thermal stability and oral toxicity. CDs enhanced the solubility of DTX. Nanoparticles were found within 144.8 ± 65.19 - 372.0 ± 126.9 nm diameters with polydispersity ranging 0.117-0.375. The particles were found round & circular in shape with smooth and non-porous surface. Increased quantity of drug release was observed from DTX-CDs loaded nanoparticles than pure drug loaded nanoparticles. Oral toxicity in rabbits revealed biochemical, histopathological profile with no toxic effect on cellular structure of animals.