Cyclodextrins (CDs) have revolutionized the pharmaceutical industry with their ability to enhance the stability, solubility, and bioavailability of a wide range of active substances. These cyclic oligosaccharides, with a unique hydrophilic exterior and hydrophobic cavity, form inclusion complexes with poorly soluble drugs, improving their pharmacokinetic profiles and therapeutic efficacy. This review explores the multifaceted roles of cyclodextrins in pharmaceutical formulations, ranging from oral, ophthalmic, parenteral, and topical applications to their emerging use in targeted therapies, gene delivery, and treatment of neurodegenerative, cardiovascular, and infectious diseases. Cyclodextrins not only improve drug solubility and controlled release but also reduce toxicity and side effects, leading to safer and more effective treatments. Recent advancements, such as cyclodextrin-based nanoparticles, offer promising pathways for cancer therapy, chronic disease management, and personalized medicine. As research continues, cyclodextrins remain at the forefront of innovation in drug delivery systems, ensuring better patient outcomes and expanding the possibilities of modern therapeutics.