In a cell, proteins exist in crowded environments; these environments influence their stability and dynamics. Similarly, for an enzyme molecule encapsulated in an inorganic cavity as in biosensors or biocatalysts, confinement and even surface effects play important roles in its stability and dynamics. Using a minimalist model (two-dimensional HP lattice model), we have carried out Monte Carlo simulations to study confinement effects on protein stability. We have calculated heat capacity as a function of temperature using the histogram method and results obtained show that confinement tends to stabilize the folded conformations, consistent with experimental results (some reported here) and previous theoretical analyses. Furthermore, for a protein molecule tethered to a solid surface the stabilization effect can be even greater. We have also investigated the effects of confinement on the kinetics of the refolding and unfolding processes as functions of temperature and box size. As expected, unfolding time increases as box size decreases, however, confinement affects folding times in a more complicated way. Our theoretical results agree with our experimentally observed trends that thermal stability of horseradish peroxidase and acid phosphatase, encapsulated in mesoporous silica, increases as the pore size of the silica matrix decreases. (C) 2003 American Institute of Physics.