<p>Indigo, a ubiquitous vat dye in denim manufacturing, is characterized by its exceptionally low aqueous solubility, necessitating chemical reduction to its leuco form using hazardous agents such as sodium dithionite. This conventional process yields sulfite, sulfate, and sulfide byproducts, leading to significant environmental and toxicological concerns. To address these limitations, this study synthesized 1:1 molar ratio inclusion complexes of indigo with β-cyclodextrin (β-CD) and hydroxypropyl-β-cyclodextrin (HP-β-CD) to enhance solubility and stability without chemical intervention. The formation of these complexes was rigorously validated through UV–Vis, FT-IR, PXRD, TEM, and ¹H-NMR spectroscopy. Notably, the aqueous solubility of indigo was enhanced 3.58-fold and 5.55-fold for the β-CD and HP-β-CD complexes, respectively. Furthermore, both complexes demonstrated superior thermal and photostability, with HP-β-CD exhibiting the most pronounced effects. This cyclodextrin-assisted solubilization was successfully extended to naturally extracted Jeju Indigo, underscoring its broad applicability. Our findings suggest that cyclodextrin-based encapsulation offers a sustainable and effective alternative to conventional reduction-oxidation dyeing processes.</p> Graphical abstract <p></p>