Benexate.CD, a new orally active antiulcer agent, is an inclusion compound of benexate and beta-cyclodextrin (beta-CD). The present report investigated the significance of complex formation on the antiulcer activity of benexate, the effective ingredient of benexate.CD. To evaluate the improvement of solubility, the dissolution properties of benexate from various pharmaceutical forms into the 1st fluid of the Pharmacopoeia of Japan, a model of gastric juice, were compared. Benexate itself was hardly soluble, but the physical mixture of benexate and beta-CD showed a solubility increase of benexate. On the other hand, benexate.CD showed a supersaturated dissolution curve and its peak concentration was 8 times higher than the solubility of the physical mixture. When benexate.CD was administered orally to pylorus ligated rats in the powder formulation, the similar supersaturated dissolution behavior was observed in the stomach, and the benexate level in gastric tissue was higher than that in benexate or the physical mixture administration. Benexate.CD extremely inhibited the ulcer formation caused by HCl-ethanol ingestion, but there was no significant inhibition after treatment with benexate or the physical mixture. These results indicated that it is necessary for benexate to form an inclusion compound in order to exert a strong antiulcer activity.