The effect of concentration of a cationic surfactant, cetylpyridinium chloride (CPyCl), on the inclusion complex between β-cyclodextrin (β-CD) and a guest molecule, trans-2-[4-(dimethylamino)styryl]benzothiazole (DMASBT), has been studied by exploiting the twisted intramolecular charge transfer (TICT) fluorescence properties of the latter. The steady-state fluorescence, fluorescence anisotropy, time-resolved fluorescence of DMASBT and dynamic light scattering (DLS) methods have been used to monitor the different phases of binding of CPyCl with the β-CD-DMASBT system. At the chosen concentration of β-CD (8.0 mM), the β-CD molecules in the presence of 5.0 μM of DMASBT exist as extended nanotubes forming rod-like suprastructures along with simple adducts and single nanotubes. At a very low concentration of CPyCl (<0.7 mM), it partially binds with all the forms of β-CD-DMASBT inclusion complexes. Above 0.7 mM, CPyCl effectively binds with the β-CD-DMASBT system forming a β-CD-DMASBT-CPyCl complex. The premicellar aggregation starts at ∼10.0 mM of CPyCl, while micellization occurs at ∼20.0 mM, which is suggested to be the apparent critical micellar concentration (CMC*) of CPyCl. Above CMC*, the CPyCl molecules replace almost all DMASBT molecules from the cavities of nanotubes and the released DMASBT molecules then get solubilized in the micelles of CPyCl. This phenomenon suggests that the present system can be explored for the development of a drug-delivery system. The hydrodynamic radii of various components in the solution have been determined by the DLS method. © 2012 The Royal Society of Chemistry.