The supramolecular interaction of metformin and β-cyclodextrin (β-CD) has been investigated utilizing Uv-visible spectroscopy and Fourier transforms infrared spectroscopy (FTIR). The formation of inclusion complex has been confirmed based on the changes of the spectral properties. The results showed that β-CD reacted with metformin to form 1:2 host-guest complex. In addition, solid inclusion complex was synthesized. Based on the significant enhancement of the absorption intensity of metformin produced through complex formation, a simple, accurate, rapid and highly sensitive spectrophotometric method for the analysis of metformin in pharmaceutical dosage form was developed and validated. The parameters influencing the inclusion complex formation were studied and optimized. At optimum experimental conditions a linear relationship between absorbance and concentration of metformin is observed in range of 2-20 μg mL-1 of metformin at maximum wave length 233 nm, with limit of detection (LOD) 0.61 μg mL-1 and correlation coefficient of (r= 0.9996). The proposed method was applied successfully to the determination of metformin in pharmaceutical preparations and the results were satisfactory in comparison to official method.