To improve the instability of prostaglandin E₁ (PGE₁) in ointments, potential use of O-carboxymethyl-O-ethyl-β-cyclodextrin (CME-β-CyD) was examined, comparing with parent β-CyD. Inclusion complexation of PGE₁ in aqueous solution and in solid state was investigated by circular dichroism and carbon-13 nuclear magnetic resonance spectroscopies, kinetic method, powder X-ray diffractometry and thermal analysis. The inclusion ability of CME-β-CyD against PGE₁ was much higher than that of β-CyD, i.e., stability constants determined by the kinetic method were 880 and 290M^-1 for the CME-β-CyD and β-CyD and β-CyD complexes, respectively.The chemical instability of PGE₁ in fatty alcohol propylene glycol (FAPG) ointment and in aqueous solution was significantly improved by the complexation with CME-β-CyD, while parent β-CyD accelerated the degradation in neutral and alkailine solutions. The stabilizing effect of CME-β-CyD seemed to come from 1) the adjustment of microscopic and/or macroscopic pH to about 4 where PGE₁ was most stable, 2) the low hygroscopicity of CME-β-CyD preventing access of water molecules to PGE₁ and 3) the inclusion of the reactive site, where the first effect contributed most significantly to the stabilization. The in vitro release of PGE₁ from FAPG ointments was enhanvced by complexastioin with CME-β-CyD, and its superior release characteristics were retained even after aging. The limited data obtained here suggest that CME-β-CyD is useful for improvements of not only the chemical instability of PGE₁ in ointments as well as solution, but also the releaese rate from the ointment.