Interactions among macrocyclic hosts and dyes/drugs have been explored extensively for their direct usage in controlled uptake and release of large number of potential drug molecules. In this paper we report the non-covalent interaction of cucurbit[8]uril macrocycle (CB8) with a biologically important dye, neutral red, by absorption and fluorescence spectroscopy. A comparative analysis with the complexation behaviour of the dye with CB7, the lower homologue of CB8, indicates contrasting guest binding behaviour with significant changes in the photophysical characteristics of the dye. While CB7 interaction leads to a 1 : 1 stoichiometry resulting in similar ~ 6 fold enhancement in the fluorescence emission of the dye, CB8 displays signatures for a 1 : 2 host-guest stoichiometry with drastic reduction in the fluorescence emission. Apart from the evaluation of similar ~ 2 unit shift in the protolytic equilibrium on complexation (pK_a shift), the measurements with tryptophan established a selective guest exchange to favour a co-localized dimer inside the CB8 cavity. In a protein medium (BSA), the 1 : 2 complex was converted to a 1 : 1 : 1 CB8-NRH⁺-BSA complex. The finding that NRH⁺ can be transferred from CB8 to BSA, even though the binding constant for NRH⁺-CB8 is much higher than NRH⁺-BSA, is projected for a controlled slow release of NRH⁺ towards BSA. Since the release and activity of drugs can be controlled by regulating the protolytic equilibrium, the macromolecular encapsulation and release of NRH⁺ demonstrated here provide information relevant to host-guest based drug delivery systems and its applications.