Reaction of potassium vanadate with the hydrazone ligand derived from Schiff-base condensation of salicylaldehyde and biphenyl-4-carboxylic acid hydrazide (H(2)salhybiph) in the presence of two equivalents alpha-cyclodextrin (alpha-CD) in water yields the 1:2 inclusion compound K[VO(2)(salhybiph)@(alpha-CD)(2)]. Characterization in solution confirmed the integrity of the inclusion compound in the polar solvent water. The inclusion compound crystallizes together with additional water molecules as K[VO(2)(salhybiph)@(alpha-CD)(2)].18H(2)O in the monoclinic space group P2(1). Two alpha-CD rings forming a hydrogen bonded head to head dimer are hosting the hydrophobic biphenyl side chain of the complex K[VO(2)(salhybiph)]. The supramolecular aggregation of the inclusion compound in the solid state is established through hydrogen bonding interactions among adjacent alpha-CD hosts and with vanadate moieties of the guest complexes as well as ionic interactions with the potassium counterions. In contrast the supramolecular structure of the guest complex K[VO(2)(salhybiph)] without the presence of CD host molecules is governed by pi-pi-stacking interactions and additional CH/pi interactions. The new inclusion complex K[VO(2)(salhybiph)@(alpha-CD)(2)] and the analogous 1:1 inclusion compound with beta-CD were tested as catalyst in the oxidation of methyl phenyl sulfide (thioanisol) using hydrogen peroxide as oxidant in a water/ethanol mixture, under neutral as well as acidic conditions.