A novel cryogenic spray-freezing into liquid (SFL) process was developed to produce microparticulate powders consisting of an active pharmaceutical ingredient (API) molecularly embedded within a pharmaceutical excipient matrix. In the SFL process, a feed solution containing the API was atomized beneath the surface of a cryogenic liquid such that the liquid-liquid impingement between the feed and cryogenic liquids resulted in intense atomization into microdroplets, which were frozen instantaneously into microparticles. The SFL micronized powder was obtained following lyophilization of the frozen microparticles. The objective of this study was to develop a particle engineering technology to produce micronized powders of the hydrophobic drug, danazol, complexed with hydroxypropyl-beta-cyclodextrin (HPbetaCD) and to compare these SFL micronized powders to inclusion complex powders produced from other techniques, such as co-grinding of dry powder mixtures and lyophilization of bulk solutions. Danazol and HPbetaCD were dissolved in a water/tetrahydrofuran cosolvent mixture prior to SFL processing or slow freezing. Identical quantities of the API and HPbetaCD used in the solutions were co-ground in a mortar and pestle and blended to produce a co-ground physical mixture for comparison. The powder samples were characterized by differential scanning calorimetry (DSC), powder X-ray diffraction (XRD), Fourier transform infrared spectrometry (FTIR), scanning electron microscopy, surface area analysis, and dissolution testing. The results provided by DSC, XRD, and FTIR suggested the formation of inclusion complexes by both slow-freezing and SFL. However, the specific surface area was significantly higher for the latter. Dissolution results suggested that equilibration of the danazol/HPbetaCD solution prior to SFL processing was required to produce the most soluble conformation of the resulting inclusion complex following SFL. SFL micronized powders exhibited better dissolution profiles than the slowly frozen aggregate powder. Results indicated that micronized SFL inclusion complex powders dissolved faster in aqueous dissolution media than inclusion complexes formed by conventional techniques due to higher surface areas and stabilized inclusion complexes obtained by ultra-rapid freezing.