Pioglitazone HCl is an antidiabetic agent with poor aqueous solubility. Inclusion complexes of pioglitazone HCl were prepared with β-cyclodextrin using various methods (physical mixing, kneading method, co-precipitation). The main aim of the present invention is to study the effect of the method of preparation on the dissolution profiles of pioglitazone HCl-β-Cyclodextrin inclusion complexes . The phase solubility profile of pioglitazone HCl with β-cyclodextrin was classified as AL-type and stability constant with 1:1 molar ratio was 115.45, calculated from the phase solubility diagram. Formation of the inclusion complex between pioglitazone HCl and β-cyclodextrin was confirmed by the Fourier Transform Infrared (FT-IR) spectroscopy. The dissolution profile of inclusion complexes were determined and compared with those of pioglitazone HCl alone and its physical mixtures. The dissolution rate of the pioglitazone HCl-β-cyclodextrin inclusion complex prepared by the co-precipitation method was six times higher when compared with the pure drug. The method of complexation of pioglitazone HCl in β-CD increased the dissolution rate of the drug in the following order: Coppt > KM > PM >Drug.