A sulfoalkyl ether-alkyl ether cyclodextrin (SAE-AE-CD) derivative is provided. The SAE-AE-CD possesses advantages over known SAE-CD and AE-CD derivatives as well as over the parent cyclodextrin by being more water soluble and less membrane disturbing. The SAE-AE-CD includes at least one sulfoalkyl ether group and at least one alkyl ether group even though the degree of substitution for the functional groups can be different. The SAE functional group can be present in molar excess over the AE functional group and vice versa. The total degree of substitution of the cyclodextrin, with respect to both functional groups, can be varied such that a minority or a majority of the hydroxyl moieties of the CD are derivatized. The SAE-AE-CD derivative can be used to solubilize compounds with insufficient water solubility. In some cases, they also stabilize compounds in solution against degradation or to solubilize degradation products formed during degradation. In addition, SAE-AE-CD can also be used for other purposes such as osmotic agents, agents used to mask the taste of problematic drugs. Surprisingly, while AE-CDs are known to be toxic by being membrane disturbing, SAE-AE-CDs are less membrane disturbing and therefore have greater safety.