This work was committed to the polymerization of hydrophobic ketoethyl methacrylate monomer in aqueous medium in the presence of cyclodextrin, instead of polymerizing the monomer in toxic and volatile organic solvents. For this purpose, a new ketoethyl methacrylate monomer, p-methylphenacylmethacrylate (MPMA), was synthesized from the reaction of p-methylphenacylbromide with sodium methacrylate in the presence of triethylbenzylammonium chloride. The monomer was identified with FTIR, H-1 and C-13-NMR spectroscopies. Hydroxypropyl-beta-cyclodextrin (HPCD) was used to form a water-soluble host/guest inclusion complex (MPMA/HPCD) with the hydrophobic monomer. The complex was identified with FTIR and NMR techniques and polymerized in aqueous medium using potassium persulfate as initiator. During polymerization the resulting hydrophobic methacrylate polymer precipitated out with a majority of HPCD left in solution and a minority of HPCD bonded on the resulting polymer. The thus-prepared polymer exhibited little difference from the counterparts obtained in organic solvent in number average molecular weight (M-n), polydispersity (M-w/M-n) and yield. The investigation provides a novel strategy for preparing hydrophobic ketoethyl methacrylate polymer in aqueous medium by using a monomer/HPCD inclusion complex. (C) 2009 Wiley Periodicals, Inc. J Appl Polym Sci 115: 2933-2939, 2010