Quercetin is a flavonoid widely distributed in vegetables and fruits and exhibits strong antioxidant activity, but the poor solubility and stability of quercetin limit its function and application. The purpose of this study was to enhance the dissolution rate and stability of a poorly water-soluble drug quercetin by complexation with cyclodextrin-based nanosponges. Nanosponges are recently developed sponge-like structures and have the capacity to interact with small molecules in its matrix. In this study, five types of nanosponges were purposely designed by varying the molar ratio of beta-cyclodextrin and diphenyl carbonate. Quercetin was loaded into nanosponges by freeze-drying method. The particle sizes of plain and quercetin-loaded nanosponges are in between 40 and 100 nm with low polydispersity indices. Zeta potential is sufficiently high to obtain a stable colloidal nanosuspension. Fourier transformed infrared, Raman spectroscopy, differential scanning calorimetry, and X-ray powder diffraction studies confirmed the interaction of quercetin with nanosponges. Particle sizes measured from TEM images were in agreement with DLS results. The dissolution of the quercetin nanosponges was significantly higher compared with the pure drug. The stability of encapsulated quercetin nanosponge was tracked in a simulated intestinal fluid. A marked improvement in the photostability was also observed. In addition, the antioxidant activity of the quercetin nanosponges was more effective than pure quercetin on DPPH scavenging, anti-superoxide formation, and superoxide anion scavenging. These results signify that nanosponge formulations can be used as effective nanocarriers for the delivery of quercetin.