The hollow cavities of coordination cages can provide an environment for enzyme-like catalytic reactions of small-molecule guests. Here, we report a new example (catalysis of the Kemp elimination reaction of benzisoxazole with hydroxide to form 2-cyanophenolate) in the cavity of a water-soluble M8L12 coordination cage, with two features of particular interest. First, the rate enhancement is among the largest observed to date: at pD 8.5, the value of kcat/kuncat is 2 × 10(5), due to the accumulation of a high concentration of partially desolvated hydroxide ions around the bound guest arising from ion-pairing with the 16+ cage. Second, the catalysis is based on two orthogonal interactions: (1) hydrophobic binding of benzisoxazole in the cavity and (2) polar binding of hydroxide ions to sites on the cage surface, both of which were established by competition experiments.