A simple, sensitive and accurate spectrophotometric method for the determination of tranexamic acid (TXA) has been developed. The method was based on the charge transfer reaction between TXA as n-electron donor and 7,7,8,8-tetracyanoquinodimethane (TCNQ) as π-acceptor resulting in highly coloured stable complex, which showed maximum absorption band at wavelength of 419 nm. The formation of such complex was also confirmed by infrared measurement. The stoichiometry of the complex was found to be 1:1 between donor and acceptor as determined by Job’s continuous variation method and straight line method. The thermodynamic parameters were calculated as association constant KCT of 5109 mol−1 and Gibbs free energy ΔG° of 22.22 kJ mol−1. Different variables affecting the CT reaction were carefully studied and optimized. At the optimum reaction conditions, Beer’s law was obeyed in a concentration range of 1-18 µg mL−1 of TXA using TCNQ reagent and the limit of detection was 0.2 µg mL−1. Different analytical parameters, namely molar absorptivity (ε), relative standard deviation, correlation coefficient, limit of detection, and Sandell sensitivity, were calculated. The developed method could be applied successfully for the determination of TXA in its pharmaceutical dosage forms with a good precision and accuracy compared to the official method. DOI: http://dx.doi.org/10.4314/bcse.v28i2.3