Griseofulvin/cyclodextrin interactions were investigated in aqueous environment and in solid state. Two cyclodextrin derivatives (beta-cyclodextrin and 2-hydroxypropyl beta-cyclodextrin) were used to prepare different physical mixtures and kneaded systems, and the drug/cyclodextrin ratios were 1:1 and 1:2 mol/mol. Scanning electron microscopy (SEM), hot-stage microscopy (HSM), differential scanning calorimetry (DSC), thermogravimetry (TG), and X-ray powder diffractometry were employed to characterize pure substances and their kneaded counterparts and all of the binary systems. The solubility of griseofulvin was increased in accord with the quantity of cyclodextrin added. HSM examination revealed that 2-hydroxypropyl-beta-cyclodextrin was dissolved in the droplets of melted griseofulvin, but did not show any interactions between melted griseofulvin and beta-cyclodextrin particles. The presence of griseofulvin endothermic peak in the DSC curves of all binary systems suggests the absence of any griseofulvin/cylcodextrin inclusion compound in the solid state. In TG, data of weight loss owing to the dehydration of cyclodextrins was similar for both kneaded systems and physical mixtures. X-ray diffraction patterns exhibited the amorphous nature of 2-hydroxypropyl-beta-cyclodextrin and the crystalline nature of griseofulvin and binary systems. Griseofulvin dissolution profiles from all binary systems showed an improvement in drug dissolution, which indicates that an "in situ" drug/cyclodextrin inclusion compound was formed in the aqueous dissolution medium.