In this study we report supramolecular interaction of the cationic dye berberine (BBR) with the highly substituted polyanionic cyclodextrin derivative, sulfobutylether beta cyclodextrin (SBE10βCD). Though interaction of BBR with parent β-cyclodextrin (βCD) host is very weak, its interaction with SBE10βCD host is significantly strong with an association constant Ka as large as ∼2.67 × 105 M−1. Strong binding of BBR with SBE10βCD is governed by cooperative effect of electrostatic attraction and enhanced hydrophobic interaction caused by extended SBE10βCD cavity for bound BBR dye. In the BBR-SBE10βCD complex, lower micropolarity and rigid microenvironment of host cavity cause a large decrease both in structural agility and intramolecular charge transfer (ICT) state formation of bound BBR. Accordingly, the non-radiative de-excitation of excited BBR in the dye-host complex is reduced significantly, causing its emission intensity to increase quite largely. The BBR-SBE10βCD complex is found to be highly sensitive towards ionic strength of the medium. This property is further explored to form a ternary complex, BBR-SBE10βCD-Cd2+, with largely reduced fluorescence intensity. Interestingly, this ternary complex exhibits selective fluorescence turn-on in response to an important bio-analyte, adenosine triphosphate (ATP). Present study, thus, demonstrates a very strong supramolecular complex, BBR-SBE10βCD, which is found to be very useful in the ATP detection in the presence of Cd2+, involving the ATP responsive fluorescence.