Photophysical properties and the rotational relaxation dynamics of a phenazine based dye, neutral red, have been investigated in aqueous solutions in the presence of beta-cyclodextrin (beta-CD) using ground-state absorption and steady-state and time-resolved fluorescence measurements. It has been observed that while the neutral form (NR) of the dye forms an inclusion complex with beta-CD, its protonated form (NRH+) does not. In the presence of beta-CD (10 mM), the pK(a) value of the dye is estimated to be about 6.06 +/- 0.05, much lower than the pK(a) value of 6.81 +/- 0.05 measured in aqueous solution. Both photophysical properties and the rotational relaxation dynamics of NR undergo substantial changes in the presence of beta-CD. Steady-state and timeresolved fluorescence studies suggest simultaneous formation of 1:1 and 1:2 complexes of NR/beta-CD in aqueous solutions. Time-resolved fluorescence anisotropy measurements confirm that only NR forms an inclusion complex with beta-CD and the NR/beta-CD complex rotates as a whole with a relaxation time much longer than that observed for free NR in aqueous solution.