The solid-state properties and dissolution profile of bicalutamide $\beta$-cyclodextrin ($\beta$CD) inclusion complex were investigated. The phase solubility profile of bicalutamide with $\beta$-cyclodextrin was classified as AL-type. Stability constant with 1:1 molar ratio was calculated from the phase solubility diagram and the aqueous solubility of bicalutamide was found to be enhanced by 86% for $\beta$-cyclodextrin. Binary systems of bicalutamide with $\beta$CD were prepared by the kneading method. The solid-state properties of the complex were characterized by differential scanning calorimetry, Fourier transformation-infrared spectroscopy and X-ray powder diffractometry. It could be concluded that bicalutamide could form an inclusion complex with $\beta$-cyclodextrin. The dissolution profile of the inclusion complex was determined and compared with those of bicalutamide alone and its physical mixture. The dissolution rate of bicalutamide was significantly increased by complexation with $\beta$CD, as compared with pure drug and physical mixture.