Latanoprost is a practically insoluble prostaglandin F2α analog considered a first-line agent for glaucoma treatment. From a pharmaceutical point of view, latanoprost is challenging to be formulated as an eye drop due to its poor water solubility and the presence of an ester bond that needs to be cleaved in vivo but maintained unchanged during storage. Cyclodextrins (CDs) are known to form complexes with hydrophobic drugs, influencing their stability, availability, solubility, and tolerance in a non-predictable manner. A variety of CDs including native α, β, and γCDs as well as substituted hydroxypropylβCD, hydroxypropylγCD, dimethylβCD, sulphatedβCD, and propylaminoβCD were screened and the most appropriate CD for the formulation of latanoprost for an ocular topical application was selected. Among the tested CDs, propylaminoβCD had the best trade-off between latanoprost stability and availability, which was confirmed by its complex constant value of 3129 M−1. Phase-solubility and NMR investigations demonstrated that the propylaminoβCD effectively formed a complex involving the ester group of latanoprost providing protection to its ester bond, while ensuring proper latanoprost solubilization. Furthermore, in vivo experiments demonstrated that the latanoprost-propylaminoβCD formulation led to lower ocular irritation than the commercial latanoprost formulation used as a reference. The latanoprost-propylaminoβCD formulation was demonstrated to successfully address the main stability, solubility, and tolerance limitations of topical ocular latanoprost therapy for glaucoma.