This article provides a brief account of the supramolecular chemistry of host–guest interactions and their binding mechanisms. The characterization of host–guest complexes, especially those based on cucurbituril (CB) macrocycles, by different methods such as absorption/fluorescence spectroscopy, 1 H NMR, mass spectrometry, and isothermal titration calorimetry has been described, especially with regard to determination of the stoichiometry and binding constants. Emphasis has been laid on the photophysics of CB-based supramolecular assemblies of fluorescent dyes that have technological and biological importance. The spectacular changes in their physicochemical properties such as solubility, stability, aggregation behavior, acidity constants, and cytotoxicity are also described. Effort has been made to give suitable examples of CB-encapsulated guest assemblies and to discuss their dynamic response toward external triggers such as light and metal ions. The potential applications of these host–guest systems to controlled uptake and release of drugs, construction of photo-functional devices, aqueous-based dye lasers, molecular architectures, etc., have been discussed.