beta-Cyclodextrin-poly(ethylene glycol)-folic acid conjugate (CD-PEG-FA) was synthesized according to a two-step procedure: (1). synthesis of CD-PEG-NH(2) by reaction of monotosyl-activated beta-cyclodextrin with excess of 700 Da diamino-PEG; (2). synthesis of CD-PEG-FA by reaction of CD-PEG-NH(2) with succinimidyl ester-activated folic acid. The CD-PEG-NH(2) intermediate was purified by precipitation in acetone, and the CD-PEG-FA by gel permeation and C-18 reversed-phase chromatography. Both CD-PEG-NH(2) and CD-PEG-FA were analyzed by mass spectrometry, (1)H NMR, and UV-vis spectroscopy. All analytical methods confirmed the theoretical composition of the conjugates: the CD-PEG-NH(2) intermediate was composed of CD and PEG in the molar ratio of 1:1, and the CD-PEG-FA was composed of beta-cyclodextrin, PEG, and folic acid in the molar ratio of 1:1:1. The CD-PEG-FA conjugate was highly soluble in buffer (>42 mM) as compared to the unmodified beta-cyclodextrin (16.3 mM). Phase solubility diagrams of beta-estradiol revealed that drug solubility increases from 11 microM in buffer to 600 microM in the presence of beta-cyclodextrins and 5900 microM with CD-PEG-FA. However, the affinity of beta-estradiol for beta-cyclodextrins decreased about 4 times with PEG and folic acid conjugation. Stability studies carried out using chlorambucil confirmed that the conjugate partially prevents drug degradation in buffer, although this effect was considerably lower than that obtained with beta-cyclodextrin. Computer modeling studies showed that the folic acid linked to the beta-cyclodextrins through a PEG spacer could partially interact with the cyclodextrin cavity. Finally, CD-PEG-FA displayed reduced hemolytic effect as compared to unmodified beta-cyclodextrin.