The objective of this work was to increase the nasal absorption of acyclovir by using cyclodextrins as absorption enhancers. Acyclovir was selected as a model drug. A rat in situ nasal perfusion technique was utilized in the investigation to examine the rate and extent of absorption of acyclovir. The remaining analyte concentrations in the nasal perfusate were quantitated by reversed phase high performance liquid chromatography. In vitro enzymatic drug degradation study was carried out with rat nasal washings. Various experimental conditions were optimized such as nasal perfusion rate, pH of the perfusion medium, and concentrations of cyclodextrins such as α, β, γ, methyl-β, hydroxypropyl-β-cyclodextrins. Nasal absorption of acyclovir was pH dependent. Initial absorption rate constants were determined by the plot of log % remaining amount of drug in perfusate vs time. It was maximum at pH 7.4 and decreases at lower and higher pH conditions. The uptake of analyte by flow circuit component was assessed prior to the animal study to minimize system artifacts. In in-vitro enzymatic degradation study, no measurable degradation was observed during first week. The extent of drug absorption was increased via absorption enhancers. From the above absorption enhancers, hydroxypropyl-β-cyclodextrin appeared to be more effective for enhancing the nasal absorption of acyclovir than the other absorption enhancers. The order of increasing absorption of acyclovir caused by the enhancers was hydroxypropyl-β-cyclodextrin (5%) > methyl-β-cyclodextrin (5%) > α-cyclodextrin (1.3%) > γ-cyclodextrin (1.5%) > β-cyclodextrin (2%).