This study has been undertaken to evaluate hydrophobic cyclodextrin(CD) derivatives as a sustained release carrier of azidothymidine(AZT), AZT, which has potent activity against AIDS and AIDS-related complex as thymidine analogue, has been reported that it has significant toxicity and short half life. Therefore, it is necessary to design sustained release oral dosage form to avoid undesirable side effects attributable to an excessive plasma concentration and to reduce the frequency of administration of AZT. Inclusion complexes of AZT with $acetyl-{eta}-cyclodextrin;(AC{eta}CD)$ and $triacetyl-{eta}-cyclodextrin(TA{eta}CD)$ were prepared by solvent evaporation method. Interactions of AZT with CD were investigated by Differential Scanning Calorimetry(DSC) and Infrared Spectrophotometry(IR). The decreasing order of water solubilities of AZT and AZT-CD inclusion complexes were as follows; $AZT;(27.873{pm}0.015,mg/ml);>;AZT-AC{eta}CD;(3.377{pm}0.003);>;AZT-TA{eta}CD;(2.528{pm}0.001)$. Partition coefficients of $AZT-AC{eta}CD;and;AZT-TA{eta}CD$ inclusion complexes were increased by 1.27-fold, 1.54-fold in pH 1.2 and 1.32-fold, 1.47-fold in pH 6.8 in comparison with that of AZT. The mean dissolution time (MDT, min) which represents the rapidity of dissolution rate of AZT, $AZT-AC{eta}CD,;AZT-TA{eta}CD$ were 5.12, 14.02 and 19.38 min in pH 1.2 and 2.52, 15.19 and 18.19 min in pH 6.8. AZT was very rapidly and completely dissolved in pH 1.2 and pH 6.8 within 5 minutes. But AZT-CD inclusion complexes showed the sustained release pattern in comparison with AZT alone. The simultaneous in situ nasal and jejunal recirculation study to compare the intrinsic absorptivity and the property of absorption sites revealed that the absorption of $AZT-TA{eta}CD;(N:35.35{pm}1.08%,;J:27.47{pm}1.18%)$ was more than that of $AZT;(N:16.89{pm}2.25%,;J:15.86{pm}2.33%)$. The above results suggest that $TA{eta}CD$ which is a hydrophobic cyclodextrin may serve as sustained release carrier with absorption enhancing effect.