<p>In this article, we have studied the modulated photophysics and photodynamic of an excited state proton transfer (ESIPT) molecule1-(1<i>H</i>-benzo[d]imidazol-2-yl)naphthalen-2-ol (<b>H-BINO</b>) following host-guest inclusion complexation with water-soluble host Cucurbit[7]uril (CB7) with the help of steady-state, time-resolved spectroscopic measurements and is supported by Density Functional Theory (DFT) calculations. The change of absorbance and fluorescence enhancement with blue shift of emission maxima indicates host-guest inclusion complexation and favourable enol-keto photo-isomerisation of <b>H-BINO</b> inside the CB7 nanocavity. Complexation offers an increment of excited state lifetime from 0.7ns and 2.1ns observed in aqueous medium to 0.8 ns and 3.3 ns in CB7 cavity due to structural rigidity and thereby minimizing non-radiative processes. Benesi-Hildebrand (BH) plot indicates the formation of 1:1 inclusion complex (<b>H-BINO: CB7)</b> which is supported by time-resolved anisotropy measurement. Solvation of <b>H-BINO</b> inside the CB7 cavity is faster at the beginning and slows down over time with solvation correlation time of 2.46 ns. Computational structural calculations at DFT level support that inside the CB7 cavity, the reversal of stability of proton transfer keto-form with respect to the enol-form in the first excited state than the ground state. Blue shifting of experimental absorption and emission maxima inside CB7 nanocavityis well correlate with DFT calculated bands.</p>