The aim of present investigation was to enhance solubility and dissolution of Nateglinide, poorly water soluble drug with cyclodextrin (CD). The binary system of Nateglinide with cyclodextrin was prepared by different techniques. The phase solubility diagram of exhibit AL type of isotherm, which indicates linear increase in solubility as a function of cyclodextrin. The dissolution rate was found to be more effective using spray drying method of complexation in comparison with physical mixing method n kneading method of complexation. The developed cyclodextrin tablet formulation of nateglinide showed better dissolution rate than that of marketed product. A suitable UV method for dissolution study was developed. A HPLC method for assay of developed formulation was developed.