Solid-state properties and dissolution behaviour of bicalutamide-hydroxypropyl-beta-cyclodextrin binary and bicalutamide-arginine-hydroxypropyl-beta-cyclodextrin ternary systems were investigated. The effect of L-arginine (1% w/v) on stability constant of bicalutamide-hydroxypropyl-beta-cyclodextrin was also studied. The phase solubility studies of bicalutamide with HP beta CD were performed for seven days while in presence of arginine for two days. Stability constants with 1: 1 molar ratio were calculated from the phase solubility diagram. The phase solubility studies revealed that the stability constant was significantly improved in presence of arginine (1% w/v) within two days (p < 0.001). The aqueous solubility of bicalutamide was increased by 91% in binary complex and 206% in ternary complex with arginine. The binary and ternary systems prepared by kneading method in equimolar quantities were characterized by Fourier transformation-infrared spectroscopy and X-ray powder diffractometry. The dissolution properties of binary and ternary systems were determined and compared with those of bicalutamide alone. The ternary systems have shown several times faster dissolution rate than binary systems of bicalutamide.