The formation of inclusion complexes between drugs and macrocycles has proven to be an effective strategy to increase solubilization and stabilization of the drug, while in several cases improving their biological activity. In this context, we explored the formation of an inclusion complex between chemotherapeutic drug Melphalan (Mel) and cucurbit[7]uril (CB[7]), and studied its effect on Mel alkylating activity, hydrolysis, and cytotoxicity. The formation of the inclusion complex (Mel@CB[7]) was proven by absorption and fluorescence spectroscopy, NMR, docking studies, and molecular dynamics simulations. The binding constant for Mel and CB[7] was fairly high at pH 1 ((1.7 ± 0.7) × 106 M-1), whereas no binding was observed at neutral pH. The Mel@CB[7] complex showed a slightly decreased alkylating activity, whereas the cytotoxicity on the HL-60 cell line was maintained. The formation of the complex did not protect Mel from hydrolysis, and this result is discussed based on the simulated structure for the complex.