This paper reports an interesting transformation of binding mode of 2-(4-(dimethylamino)styryl)-1-methylpyridinium iodide (DASPMI) with calf thymus DNA from minor groove binding in buffer solution to intercalative binding when the dye is encapsulated inside a vesicle formed by the interaction of 1,8-naphthalimide (a charge transfer dye) with the supramolecular association of sodium dodecyl sulfate and block-copolymer polyethylene-b-polyethylene glycol. The pre-encapsulated dye in the vesicular interior binds intercalatively to ct-DNA, as evinced by the high value of equilibrium binding constant of DASPMI-DNA complex, changes in CD-spectra of DNA and isosbestic point, along with downshift and hypochromicity of absorption band. Increase in anisotropy decay by 1.5 times with a single component strongly confirms restricted motion of the probe inside ct-DNA confirming intercalative binding. The compaction of ct-DNA caused by the interaction of the vesicle allows DASPMI to bind ct-DNA in the intercalative mode. However, the groove binding mode in ct-DNA DASPMI remains unaffected by the retro-addition of the vesicles to the already bound dye to ct-DNA.