Fast disintegrating films of levocetirizine dihydrochloride useful for the treatment of acute allergic rhinitis and chronic urticaria have been developed by using the taste masking ability of cyclodextrins. The fast disintegrating films were prepared by solvent casting method. The films contained water-soluble polymers such as Kollicoat IR or pullulan, aspartame and sucralose as sweeteners and pre-gelatinized starch as disintegrant. Levocetirizine dihydrochloride was incorporated into these films by in-situ complex formation with hydroxy propyl beta-cyclodextrin. The optimized films were evaluated for weight variation, film thickness, folding endurance, tackiness, tensile strength, assay, content uniformity, in vitro disintegration and dissolution, in vivo disintegration and taste masking ability by human gustatory sensation test. Results revealed that the organoleptic properties of levocetirizine dihydrochloride were improved by complexation with hydroxy propyl beta-cyclodextrin and the complex could be successfully formulated into a fast disintegrating film.