To improve poor water solubility of cyclosporine A (CsA), hydroxypropyl-beta-cyclodextrin (HP beta CD) was incorporated into the nanoparticle formulation. Solid complexes of CsA with HP beta CD in different ratios were prepared by the kneading method. CsA containing alone or in combination with HP beta CD in poly-lactide-co-glycolide (P-CsA or P-CsA-HP beta CD) nanoparticles were prepared by the emulsification solvent evaporation method. The mean size of CsA-loaded NPs was found to be approximately 220 nm. The solubility of CsA was significantly improved and the phase solubility diagram of CsA-HP beta CD systems showed an AL type phase. Nanoparticles showed high CsA encapsulation efficiency (88%) and production yield (89%). Release rate was increased by the presence of HP beta CD and total cumulative release ranged from 75% to 96% in 24 h. In vitro cytotoxicity study assay resulted in a low toxicity for all types of nanoparticles. After 6 h incubation period, the cellular uptake was found at 33% and 32% for P-CsA and P-HP beta CD-CsA nanoparticles, respectively.