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Herbal drug naringenin is well known for its anti-cancer, anti-oxidant, anti-inflammatory activities, as carbohydrate metabolism promoter, immunity system modulator, BCRP/ABCG2 inhibitor, hormone substitute and hormone antagonist since decades. However, use of naringenin as pharmaceutical aid is hindered due to its low aqueous solubility. In the present study, β-cyclodextrin and hydroxy propyl -β- cyclodextrin based biocompatible nanoforms were developed by the exploitation of self-assembly properties of cyclodextrins in aqueous media using sodium dodecyl sulphate and Pluronic F108 as co-surfactants. Prepared formulations were evaluated for various parameters such as particle size, zeta potential, polydispersity index, percent encapsulation efficiency, drug solubility and in vitro permeation studies. Particles present in all the formulations were not greater than the 161.2 nm with surface charge up to -24.8 mV and highest polydispersity index of 0.739. Aqueous solubility of drugs in prepared formulations was increased by 4 fold. Drug permeability was increased twice of free drug naringenin. It was concluded that the cyclodextrin based biocompatible nanosystems can be developed in the improvement of aqueous solubility and hence the bioavailability of herbal drugs. [ABSTRACT FROM AUTHOR]