Spironolactone is a steroidal drug acting as a specific aldosterone antagonist used as potassium sparing diuretic.  It shows variable absorption and bioavailability due to its poor solubility.  The objective of this study was to investigate the effect of betacyclodextrin (BCD) on the solubility and dissolution of spironolactone using physical mixing and co-evaporation methods.  The physical mixtures of different w/w drug/carrier ratios (1:1, 1:2 and 1:3) were prepared by simple mixing.  Also co-evaporate systems containing (1:1, 1:2 and 1:3) w/w drug/carrier ratios were prepared.  The physicochemical characterization of the systems using differential scanning calorimetry (DSC) and powder X-ray diffraction was carried out to detect the interaction between the drug and the carrier, moreover, quantitative solubility and in-vitro dissolution studies of spironolactone alone and in physical mixtures or co-evaporates were studied in simulated gastric fluid (SGF) of pH 1.2 and in simulated intestinal fluid (SIF) of pH 7.5. The reduction of drug peaks in X-ray diffraction pattern of the co-evaparate and the absence or reduction of drug peaks in DSC profile of the physical mixture and the co-evaporate suggest the transformation of crystalline spironolactone into an amorphous form due to the inclusion complexation with betacyclodextrin.  The study showed an increase in the solubility values and an improvement in the dissolution pattern of the drug in case of the physical mixtures and the co-evaporates.