alpha-,beta-,gamma-, and 2-hydroxypropyl-beta-cyclodextrins were capable of forming water-soluble inclusion complexes with several polynuclear aromatic hydrocarbons (PAHs). The highest solubilities were noted for beta-cyclodextrin and 2-hydroxypropyl-beta-cyclodextrin (hp beta CD). The solubility of PAHs in hp beta CD was enhanced 224-fold and 7,500-fold for naphthalene and benzo[a]pyrene, respectively, with other PAHs yielding values between these limits. The ability of lignin peroxidase (LiP) to oxidize these cyclodextrin-included substrates was similar to that previously reported for mixed solvent systems. The enzyme oxidized anthracene, pyrene, and benzo[a]pyrene but not naphthalene, phenanthrene, chrysene, and benzo[e]pyrene. The lignin peroxidase exhibited a preference for oxidizing either anthracene or benzo[a]pyrene when mixed with pyrene. On the basis of fluorescence measurement, anthracene and benzo[a]pyrene were easily distinguished by exciting at 250 nm for anthracene and 295 nm for benzo[a]pyrene. Veratryl alcohol severely inhibited the pyrene assay, with 50% inhibition noted at 0.3 mM while veratryl alcohol activated the reactions between LiP and either anthracene or benzo[a]pyrene. Maximal activation was obtained at 1.5 mM veratryl alcohol and no inhibitory effect was detected up to 4.0 mM. Under identical conditions, the rate of reaction with veratryl alcohol (4.0 mM) was 11- and 14-fold faster for benzo[a]pyrene and anthracene, respectively, when compared to the assays in the absence of veratryl alcohol.