Two modified cyclodextrins, heptakis-(2,6-di-O-methyl)-β-Cyclodextrin (DM-β-CD) and hydroxypropyl-β-cyclodextrin (HP-β-CD), were adopted for preparing piroxicam-cyclodextrin (PIR-CD) inclusion complexes, in comparison to '3-cyclodextrin (β-CD). Inclusion complexes were prepared via co-precipitation and freeze drying techniques in a 1:1 and 1:2.5 molar ratio (drug-to-CD). The physical mixtures were also prepared in the same molar ratios for comparison. The in vitro dissolution rate of piroxicam (CAS 36322-90-4) from PIR-CD systems varied according to the types of CD used, the method of preparation of inclusion complexes, and the guest-host molar ratios. Piroxicam-dimethyl-β-cyclodextrin (PIR-DM-β-CD) systems were superior in increasing the dissolution rate of PIR compared to piroxicamhydroxypropyl-β-cyclodextrin (PIR-HP-β-CD) and piroxicam-β-cyclodextrin (PIR-β-CD) systems. The methods of preparing solid complexes played the major role. The freeze drying method showed the superior results, particularly if combined with the use of DM-β-CD. Furthermore, PIR-DM-β-CD freeze dried product in the 1:2.5 molar ratio was chosen for in vivo study in comparison with two commercial products. The bioavailability and pharmacokinetic parameters showed that administration of PIR-DM-β-CD freeze dried product in the 1:2.5 molar ratio to rabbits is characterized by a higher oral absorption rate and extent than those of one of the marketed products. Significant differences have been observed among C_max, t_max and AUC_0-∞. Comparative bioavailability of the same formula with the other marketed product showed significant differences among C_max and t_max (absorption rate), but not in the AUC_0-∞ (absorption extent). A good to excellent in vitro-in vivo correlation between the dissolution parameters and the bioavailability data was observed which indicates that the enhancement of dissolution was the main factor behind the improvement of bioavailability with DM-β-CD.