Terfenadine, antihistaminic drug, is poorly soluble in water. The purpose of this study is to investigate the possibility of using $terfenadine-{eta}-cyclodextrin$ inclusion compound, instead of terfenadine, as the active substance of solid dosage form by improving the solubility, dissolution and anti-histaminic activity of terfenadine. The solubility and binding characteristics of $terfenadine-{eta}-cyclodextrin$ complex in pH $1.2{sim}6.8$ were investigated. Furthermore, the preparing method of $terfenadine-{eta}-;cyclodextrin$ inclusion compound was setting up and its physico-chemical characteristics such as DSC curve, solubility, dissolution and anti-histaminic activity were investigated. In conclusion, the solubility of terfenadine was increasing ${eta}-cyclodextrin$ and with the decreasing pH. $Terfenadine-{eta}-cyclodextrin$ inclusion compound, whose yield is almost 100%, was prepared by neutralization method. This inclusion compound was 200-times as soluble as terfenadine in pH 1.2-6.8. In addition, it had the faster dissolution and anti-histaminic activity than terfenadine. Therefore, it is used to the active substance of solid dosage form such as tablet and capsule in stead of terfenadine.