Cyclodextrins are a group of compounds that enhances permeability through biological membrane, by which they act as permeation enhancers. In this present review article, the history, chemical structure, synthesis, physicochemical properties, uses, complexation phenomenon, approaches for making inclusion complexes, and its characterisation, advantages of inclusion complexes, mechanism of drug release, regulatory status and applications of cyclodextrins have been explained neatly and legibly. The future prospects of Cyclodextrins (CDs) and its derivatives are quite bright since they possess remarkably unique properties of forming inclusion complexes with drugs. An increasingly number of drugs being developed today have problem of poor solubility, bioavailability and permeability. Cyclodextrins (CDs) can serve as useful tools in the hands of pharmaceutical scientists for optimizing the drug delivery.