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Since their discovery over 100 years ago cyclodextrins (CDs) have been the subject of numerous scientific publications. In 2016 alone CDs were the subject of over 2200 research articles published in peer-reviewed journals and mentioned in over 2300 patents and patent applications, many of which were on pharmaceutical applications. Natural CDs and their derivatives are used as enabling pharmaceutical excipients that enhance aqueous solubility of poorly soluble drugs, increase drug permeability through biological membranes and improve drug bioavailability. Unlike conventional penetration enhancers, their hydrophilic structure and high molecular weight prevents them from penetrate into lipophilic membranes leaving biological membranes intact. The natural CDs and some of their derivatives have monographs in pharmacopeias and are also commonly used as food additives and in toiletry products. CDs form inclusion complexes with lipophilic moieties of hydrophobic drugs. Furthermore, CDs are able to form non-inclusion complexes and self-assembled aggregates; small and large complex aggregates with micellar-like structures that can enhance drug solubility. Excipients commonly used in pharmaceutical formulations may have additive or inhibiting effect on the CD solubilization. Here various methods used to investigate CD aggregate formation are reviewed as well as techniques that are used to increase the solubilizing effects of CDs; methods that enhance the apparent intrinsic solubility of drugs and/or the complexation efficacy and decrease the amount of CD needed to develop CD-containing pharmaceutical formulations. It will be explained how too much or too little CD can hamper drug bioavailability, and the role of CDs in solid dosage forms and parenteral formulations, and examples given on how CDs can enhance drug delivery after ocular, nasal and pulmonary administration.