Following the preparation of inclusion complex of cetirizine (CTZ) and β-cyclodextrin (β-CD), the compound was investigated to assess the possibility of modifying the physicochemical properties (solubility, release, stability, permeability) of CTZ after complexation that are vital for subsequent formulation studies involving the said complex. Changes in FT-IR/Raman spectra, DSC thermograms and XRD diffractograms confirmed the formation of a CTZ-β-CD system. Hydrophilic interaction chromatography with a DAD detector was employed to determine alterations of the CTZ concentration during studies following complexation. An analysis of a phase-solubility diagram of cCTZ = fcβ-CD indicated a linear rise in the solubility of CTZ as the concentration of β-CD increased. The inclusion of CTZ in a system with β-CD significantly reduced the instability of CTZ in the presence of oxidizing factors. It was also found that regardless of the pH of the acceptor fluids used in the release studies an increase was observed in the concentration of CTZ in CD system compared to its free form. The ability to permeate artificial biological membranes manifested by CTZ after complexation was enhanced as well. In summary, CD has significant potential to mask the bitter taste of CTZ and to counter the instability induced by oxidizing factors.