Beta cyclodextrin (β-CD) based nanosponges were synthesized and paclitaxel inclusion complex with nano-sponges were prepared using techniques of inclusion complex formation. The paclitaxel nanosponge’s complexes were evaluated for their release. The nanosponges complexes were also evaluated using DSC, FTIR, and NMR techniques for confirmation of inclusion complex formation between paclitaxel and nanosponges. Particle size and morphology of paclitaxel nanosponge’s complex were estimated using SEM, TEM and dynamic light scattering techniques. The particle sizes were found out to be in range of 400 to 600 nm. Cytotoxic efficacy of paclitaxel nanosponge complex was determined against MCF-7 cells and paclitaxel nanosponge’s complex was found to be cytotoxic and more effective against this cell line. © 2011 Bentham Science Publishers Ltd.