The purpose of the study was to prepare and evaluate the anti-inflammatory activity of cyclodextrin (CD) complex of curcumin for the treatment of inflammatory bowel disease (IBD) in colitis-induced rat model. Inclusion complexes of curcumin were prepared by common solvent and kneading methods. These complexes were further evaluated for increase in solubility of poorly soluble curcumin. The inclusion complexes were characterized for enhancement in solubility, in vitro dissolution, surface morphology, infrared, differential scanning calorimetry, and X-ray studies. Solubility, phase solubility, and in vitro dissolution studies showed that curcumin has higher affinity for hydroxypropyl-β-CD (HPβCD) than other CDs. HPβCD complex of curcumin was further investigated for its antiangiogenic and anti-inflammatory activity using chick embryo and rat colitis model. HPβCD complex of curcumin proved to be a potent angioinhibitory compound, as demonstrated by inhibition of angiogenesis in chorioallantoic membrane assay. Curcumin- and HPβCD-treated rats showed a faster weight gain compared to dextran sulfate solution (DSS) controls. Whole colon length appeared to be significantly longer in HPβCD-treated rats than pure curcumin and DSS controls. An additional finding in the DSS-treated rats was the predominance of eosinophils in the chronic cell infiltrate. Decreased mast cell numbers in the mucosa of the colon of CD of curcumin- and pure-curcumin-treated rats was observed. This study concluded that the degree of colitis caused by administration of DSS was significantly attenuated by CD of curcumin. Being a nontoxic natural dietary product, curcumin could be useful in the therapeutic strategy for IBD patients.