Perovskite quantum dots (PQDs) are increasingly utilized in various sensing applications due to their high photoluminescence quantum yield, tunable full-wavelength visible spectrum, and straightforward synthesis. However, the environmental and health concerns associated with lead-based perovskites have prompted a search for less toxic alternatives. Copper-based perovskites have shown promise as lead-free substitutes, yet their stability under polar solvents remains a challenge. This study introduces the encapsulation of copper-based perovskite nanocrystals (Cu:CsBr NCs) using hydroxypropyl-β-cyclodextrin (HP-β-CD), leveraging the cyclodextrin's hydrophobic central cavity and hydrophilic outer surface for enhanced aqueous solubility and stability. The Cu:CsBr@HP-β-CD composite was synthesized in a one-step procedure and exhibited exceptional stability in both aqueous dispersion and storage conditions. Specifically, this composite retained 98.94% of its initial fluorescence intensity following 6 h of dispersion in an aqueous solution and maintained 99.70% of its initial fluorescence intensity after 72 days of sealed storage. Additionally, the peroxidase-like activity and fluorescent properties of the composite were investigated. The results demonstrate that HP-β-CD encapsulation significantly improves the stability and solubility of copper-based perovskites without compromising their optical properties. This approach offers a promising strategy for the development of stable, functional nanomaterials with enhanced peroxidase-like activity and fluorescence, opening new avenues for applications in catalysis and sensing. The successful encapsulation of lead-free copper-based perovskite nanocrystals using HP-β-CD addresses the toxicity concerns while maintaining the performance integrity of PQDs, advancing the field toward safer and more sustainable sensing technologies.