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Ciprofloxacin, a very slightly soluble antibiotics, is known to exist as both anhydrous and hydrous forms. This study was carried out to investigate the solid phase transformation of ciprofloxacin during conventional formulation processing that impacts the performance of solid dosage forms. In addition, alternative processing and formulation options were also evaluated to circumvent phase transformation. Anhydrate and hydrate of ciprofloxacin were characterized using differential scanning calorimetry (DSC), thermogravimetric analysis (TGA), powder X-ray diffraction (PXRD) and powder dissolution. As expected, the anhydrate exhibited significantly higher dissolution rate than the hydrate. However, it rapidly converted to the hydrate upon exposure to aqueous medium. Interestingly, premixing the anhydrate with HPMC in the presence of water or ethanol was found to inhibit the processing-induced phase transition. Further studies demonstrated that wet granulation could be an option for preparing tablets with high loading of ciprofloxacin anhydrate through proper selection of excipients and control of processing conditions. Dissolution study of ciprofloxacin in HPMC based extended release matrix tablets indicated different dissolution rates between tablets containing the anhydrate and hydrate, suggesting transformation to the hydrate was significantly inhibited by HPMC in the gel layer of the hydrated tablets.