In this study, inclusion complexes (ICs) between host hydroxypropyl--cyclodextrin (HP--CD) and guest poly(vinyl alcohol) (PVA) were prepared through polymer processing with water as plasticizer and solvent. The structure of PVA/HP--CD ICs was confirmed by FTIR, H-1-NMR and 2D-NOESY NMR. The yields of PVA/HP--CD ICs were 62.5%, 51.4%, and 46.8% in twin-screw, rotor and single-screw processing, respectively. The crystallinity, thermal properties and mechanical properties of the PVA/HP--CD ICs were characterized by X-ray diffraction, differential scanning calorimetry, thermal gravimetric analysis and tensile tests, respectively. The results indicated that HP--CD could establish strong interfacial interaction with PVA through hydrogen bonding and form ICs with PVA. As a result, crystallinity and melting temperature decomposition temperature of PVA were decreased. Compared with pure PVA, PVA/HP--CD ICs exhibited remarkable improvement in thermal stability. Moreover, the tensile strength, elongation at break and torque of ICs with different content of HP--CD were discussed. POLYM. ENG. SCI., 55:1988-1993, 2015. (c) 2014 Society of Plastics Engineers