A new gradient HPLC method has been developed and validated for the determination of both assay and related substances of donepezil hydrochloride in oral pharmaceutical formulation. Different kinds of columns and gradient elution programs were tested in order to achieve satisfactory separation between the active substance, four impurities and an interfering excipient used in the formulation. The best results were obtained using an Uptisphere ODB C-18 column 250 mm x 4.6 mm, 5 microm, UV detection at 270 nm and a gradient elution of phosphate buffer (0.005 M, pH 3.67) and methanol as the mobile phase. The method was validated with respect to linearity, precision, accuracy, specificity and robustness. It was also found to be stability indicating, and therefore suitable for the routine analysis of donepezil hydrochloride and related substances in the pharmaceutical formulation.