A two-stage precipitation polymerization in aqueous solution was used to prepare beta-cyclodextrin/poly(N-isopropylacrylamide) (beta-CD/PNIPAm) core-shell microgels. At the first stage, core microgels with CD moieties were synthesized by precipitation copolymerization of N-isopropylacrylamide (NIPAm) with a monovinyl beta-CD monomer. At the second stage, using the core particles as seeds, PNIPAm shell were further added onto the seeds by NIPAm polymerization. The microgels were characterized by means of Zetasizer Nano-ZS dynamic light scattering, TEM, IR, NMR, DSC, and TGA measurements. Using paeonol as a model drug molecule, the release behaviors of the microgels were investigated. The result indicates that the core-shell microgels could respond to change in temperature. Furthermore, the release of paeonol was related to supramolecular inclusion behavior of beta-CD and temperature sensitivity of PNIPAm.