The inclusion complexes of sulfamethoxazole (SMX) with β-cyclodextrin (βCD) and (2-hydroxypropyl) β-cyclodextrin (HPβCD) were prepared. Fluorescence spectroscopy and electrospray mass spectrometry, ESI-MS, were used to investigate and characterize the inclusion complexation of SMX with cyclodextrins in solutions. Whereas in the solid state the complexes were characterized by Fourier transform infrared spectroscopy (FTIR), powder X-ray diffraction (PXRD) and Raman techniques. Enhanced twisted intramolecular charge transfer (TICT), emission as well as local excited (LE) bands were observed upon addition of HPβCD indicate that SMX enters deeper into the cyclodextrins cavity. The stoichiometries and association constants of these complexes have been determined by monitoring the fluorescence data. The effect of presence of ternary components like arginine and cysteine on the complexation efficiency of SMX with cyclodextrins was investigated. Molecular Dynamic simulations were also performed to shed an atomistic insight into the complexation mechanism. The results obtained showed that complexes of SMX with both cyclodextrins are stabilized in aqueous media by strong hydrogen bonding interactions.