Curcumin, a dietary pigment responsible for the yellow color of curry, has been used for the treatment of inflammatory diseases and exhibits a variety of pharmacological effects such as anti- inflammatory, anti-tumor, anti-oxidant, and anti-viral activity. In order to examine the potency of the curcumin in inflammation we used carrageenan induced rat hind paw odema model. As curcumin is practically water insoluble, it is hypothesized that pharmacological activity of curcumin could be improved by enhancing its water solubility. Water soluble complexes of curcumin with cyclodextrins were prepared and screened for greater solubility. Pure curcumin 100 mg/kg body weight along with curcumin complexes equivalent to 100 mg/kg body weight of pure curcumin were tested for the anti-inflammatory activity in Wister rats male rats using carrageenan induced hind paw edema model and compared with that of the reference compound diclofenac sodium at a dose level of 10 mg/kg body weight. Results were statistically analyzed using ANOVA. All the treatment groups showed statistically significant anti-inflammatory activity compared with that of vehicle control and positive control.