Terfenadine, antihistaminic drug, is poorly soluble in water. The purpose of this study is to investigate the possibility of using terfenadine-β-cyclodextrin inclusion compound, instead of terfenadine, as the active substance of solid dosage form by improving the solubility, dissolution and anti-histaminic activity of terfenadine. The solubility and binding characteristics of terfenadine-β-cyclodextrin complex in pH 1.2∼6.8 were investigated. Furthermore, the preparing method of terfenadine-β-cyclodextrin inclusion compound was setting up and its physico-chemical characteristics such as DSC curve, solubility, dissolution and anti-histaminic activity were investigated. In conclusion, the solubility of terfenadine was increasing by β-cyclodextrin and with the decreasing pH. Terfenadine-β-cyclodextrin inclusion compound, whose yield is almost 100%, was prepared by neutralization method. This inclusion compound was 200-times as soluble as terfenadine in pH 1.2-6.8. In addition, it had the faster dissolution and anti-histaminic activity than terfenadine. Therefore. it is used to the active substance of solid dosage form such as tablet and capsule in stead of terfenadine.