Telmisartan (TEL) is a poorly bioavailable antihypertensive drug candidate owing to its low solubility in all the biofluids. The present study is aimed to enhance the solubility of TEL by forming an inclusion complex with sulfobutylether beta-cyclodextrin (SBE-β-CD), discover its mode of inclusion and predict the bioavailability of the prepared complexes. The formation of the inclusion complex is explained based on the hydrogen bond propensities and molecular dynamics simulations. Freeze-drying method was employed for the preparation of inclusion complexes. These complexes were subsequently characterized by powder X-ray diffraction, differential scanning calorimetry, and Fourier transform-infrared spectroscopy. The spatial configuration of the drug inside the cyclodextrin cavity is probed using 1H and 13C NMR. The in silico docking results are in good agreement with the experimental data and reveal that the hydrogen bond is formed as a part of the guest molecule enters from the broader end of the ring and the protons at the interior portion of the molecule interact with the carboxylic acid (–COOH) group of TEL leading to the formation of a hydrogen bond. The phenyl moiety of TEL occupies the central core and forms multiple Van-der-Waals interactions with the glucopyranose units of the SBE-β-CD. The inclusion complex demonstrates significantly higher in vitro dissolution profile as compared with plain TEL. The GastroPlus™ simulation software generated parameters of inclusion complex in comparison to plain TEL show a seven fold increase in Cmax and 18 fold increase in bioavailability.