We present our first studies of the femtosecond dynamics of reactions in confined nanocavities in water solutions. Intramolecular proton transfer and isomerization dynamics of a hydrogen-bonded molecule (HPMO) in liquid solutions and encapsulated in the cavity formed by beta-cyclodextrin (diameter similar to 8 Angstrom) is studied using the technique of fluorescence up-conversion. Our results suggest that the proton transfer in aprotic solvents occurs in much less than 300 fs while upon encapsulation this initial step is slowed to the subpicosecond time scale. Furthermore, in these aprotic solvents, HPMO undergoes a picosecond twisting motion around the interaromatic single bond, which is noticeably inhibited when the molecule is inside the nanocavity. Such studies of condensed-phase femtochemistry in nanocavities offer several promising extensions.