Cyclodextrins are cyclic oligosaccharides which have recently been recognized as useful pharmaceutical excipients. The molecular structure of these glucose derivatives, which approximates a truncated cone or torus, generates a hydrophilic exterior surface and a nonpolar cavity interior. As such, cyclodextrins can interact with appropriately sized molecules to result in the formation of inclusion complexes. These noncovalent complexes offer a variety of physicochemical advantages over the unmanipulated drugs including the possibility for increased water solubility and solution stability. Further, chemical modification to the parent cyclodextrin can result in an increase in the extent of drug complexation and interaction. In this short review, the effects of substitution on various cyclodextrin properties and the forces involved in the drug-cyclodextrin complex formation are discussed. Some general observations are made predicting drug solubilization by cyclodextrins. In addition, methods which are useful in the optimization of complexation efficacy are reviewed. Finally, the stabilizing/destabilizing effects of cyclodextrins on chemically labile drugs are evaluated.