Sustained-release formulations such as hydroxypropyl methylcellulose (HPMC)-based hydrophilic matrix tablets of poorly water-soluble drugs often result in incomplete release because of the poor solubility and dissolution rate of the drug in the hydrophilic matrix. Sulfobutylether-beta -cyclodextrins ((SBE)(7M)-beta -CDs) have been known to improve the solubility of such drugs by forming inclusion complexes. The present paper deals with the modification of drug release from an HPMC-based matrix tablet of a sparingly water-soluble drug, prednisolone (PDL), using (SBE)-(7M)-beta -CD as a solubilizing agent. Tablets were prepared by direct compression of a physically mixed PDL, (SBE)(7M)-beta -CD, and polymer. On exposure to water, an in situ PDL:(SBE)(7M)-beta -CD complex was formed in the gel layer, and enhanced drug release relative to a control formulation was observed (lactose used as the excipient instead of (SBE)(7M)-beta -CD) Other possible changes due to the incorporation of (SBE)(7M)-beta -CD in the formulation were also probed. Incorporation of (SBE)(7M)-beta -CD lead to a higher water uptake relative to the control (lactose) formulation. For a fixed total tablet weight, polymer type, and loading, the drug release rate appeared to depend on the molar ratio of (SBE)(7M)-beta -CD to PDL and not the absolute amount of (SBE)(7M)-beta -CD present in the matrix tablet. This work shows that incorporation of (SBE)(7M)-beta -CD into the matrix tablets could be considered in designing a sustained-release tablet of poorly water soluble drugs. (C) 2001 Wiley-Liss, Inc. and the American Pharmaceutical Association J Pharm Sci 90:807-816, 2001.