An intensive and systematic investigation had been carried out on the Delta(1)-dehydrogenation of cortisone acetate (CA) to prednisone acetate (PA) by Arthrobacter simplex TCCC 11037 in the presence of native and modified beta-cyclodextrins (beta-CDs). The biotransformation was improved through the formation of the host-guest inclusion complex between CA and CDs in aqueous solution. The inclusion complexes of CDs with CA were investigated by means of phase solubility, 2D NMR spectroscopy and differential scanning calorimetry (DSC). The structural difference of CDs resulted in the stoichiometric differences between the complexes, the RM-beta-CD-CA, SBE-beta-CD-CA, HP-beta-CD-CA complexes were 1:1 whereas beta-CD-CA gave both 1:1 and 2:1 complexes, of which the 2:1 complex decreased the soluble CA concentration and inhibited the dissociation of beta-CD-CA in aqueous solution. The increase in solubility of CA was in the order of RM-beta-CD>SBE-beta-CD>HP-beta-CD>beta-CD. RM-beta-CD-CA, SBE-beta-CD-CA and HP-beta-CD-CA exhibited the higher biotransformation rate in comparison with native beta-CD. And the solubilization of CDs for CA in aqueous medium plays a key role in the biotransformation process. The article focuses on the various factors influencing the substrate water solubility, complex stability and biotransformation of CA through the addition of CDs in order to solve many problems associated with the process of drug delivery and biotransformation of different novel steroids.