The present work demonstrates the effect of β-cyclodextrin (β-CD) nanocaging on the photophysical properties of Excited-State Intramolecular Proton Transfer (ESIPT) probe 3,5,6-trichlorosalicylic acid (TCSA) through steady-state absorption, emission and time-resolved emission spectroscopy. The remarkable enhancement of tautomer (proton transferred form) emission of TCSA as a result of inclusion complex formation with β-CD has been argued to be principally due to retardation of radiationless decay channels within the encapsulated state. A quantitative assessment of the emission intensity data on Benesi–Hildebrand equation reveals a 1:1 stoichiometry for TCSA:β-CD complex. The steady-state anisotropy, REES, and time-resolved fluorescence decay measurements are consistent with other experimental findings. Additionally, chaotrope (urea)-induced perturbation of the phenomenon of host–guest inclusion complex formation has been elucidated for a series of urea concentration. The present findings have been interpreted on the basis of the hydrophobic interaction mechanism of urea, rather than water 3-D structure rupture. The data unravel that the perturbation of solvation of the β-CD receptor is not important in the presence of urea, while the hydrophobic interaction with free probe molecules could be instrumental behind the observed lowering of TCSA:β-CD binding strength in the presence of urea.