An M8L12 coordination cage, which is water-soluble but has a hydrophobic interior cavity, is an effective host for a wide range of small organic guests; the factors responsible for guest binding have been investigated in detail. Benzisoxazole is a competent guest and, when bound, undergoes the Kemp elimination reaction with a rate acceleration of up to 2 x 10(5) times compared to the reaction of unbound benzisoxazole; the reasons for this have been analyzed.