The objective of this work is physicochemical characterization of nimesulide-cyclodextrin binary systems both in solution and solid state and to improve the dissolution properties of nimesulide (N) via complexation with alpha-, beta, and gamma-cyclodextrins (CDs). Detection of inclusion complexation was done in solution by means of phase solubility analysis, mass spectrometry, and 1H nuclear magnetic resonance (1H-NMR) spectroscopic studies, and in solid state using differential scanning calorimetry (DSC), powder x-ray diffractometry (X-RD), scanning electron microscopy (SEM), and in vitro dissolution studies. Phase solubility, mass spectrometry and 1H-NMR studies in solution revealed 1:1 M complexation of N with all CDs. A true inclusion of N with beta-CD at 1:2 M in solid state was confirmed by DSC, powder X-RD and SEM studies. Dissolution properties of N-CD binary systems were superior when compared to pure N.