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A novel water-soluble oral satraplatin/β-cyclodextrin inclusion complex was prepared and characterized with a variety of techniques. Molecular dynamics simulations were performed to clarify its inclusion mechanism. Enabled by encapsulation with cyclodextrin, the water solubility of satraplatin was successfully increased to 7.4 mg mL−1 and significantly improved by phase solubility studies. Meanwhile, the stability of satraplatin in acidic and weak alkaline aqueous solution was also effectively enhanced by forming the inclusion complex. Importantly, in an in vitro cytotoxicity test, the satraplatin encapsulated complex displayed superior cytotoxicity compared to free satraplatin against A549 and MCF-7 cells but was almost non-toxic to Caco-2 cells. In an in vivo antitumor test, this satraplatin encapsulated complex has shown much better activity in repressing lung cancer than free satraplatin but nearly no damage to intestinal mucosa by oral administration evaluated in xenograft mice models. Overall, the development of the current satraplatin/β-cyclodextrin inclusion complex has significantly improved the bioavailability of satraplatin and could benefit further applications in related pharmaceutical formulations.