A simple, specific, accurate and precise spectrophotometric stability indicating method is developed for determination of bambuterol hydrochloride (BH) in the presence of its degradation product terbutaline (TERB) and in pharmaceutical formulations. A newly developed spectrophotometric method called ratio difference method by measuring the difference in amplitudes between 245 and 260 nm of ratio spectra. The calibration curves are linear over the concentration range of 0.1～1 mg·mL-1 for BH and 0.1～0.7 mg·mL-1 for TERB with mean percentage recovery of 100.56±0.751 and 99.88±1.183, respectively. The selectivity of the proposed method is checked using laboratory prepared mixtures. The proposed method has been successfully applied to the analysis of BH in pharmaceutical dosage forms without interference from other dosage form additives and the results have been statistically compared with pharmacopeial method.