The uses of natural compounds, such as essential oils (EOs), are limited due to their instability to light, oxygen and temperature, factors that affect their application. Therefore, improving stability becomes necessary. The objective of this study was to prepare inclusion complexes of Litsea cubeba essential oil (LCEO) with β-cyclodextrin (β-CD) using physical mixing (PM), kneading (KN) and co-precipitation (CP) methods and to evaluate the efficiency of the complexes and their physicochemical properties using ATR-FTIR, FT-Raman, DSC and TG. The study also assessed cytotoxicity against human colorectal and cervical cancer cells and antifungal activity against Aspergillus flavus and Fusarium verticillioides. The complexation efficiency results presented significant evidence of LCEO:β-CD inclusion complex formation, with KN (83%) and CP (73%) being the best methods used in this study. All tested LCEO:β-CD inclusion complexes exhibited toxicity to HT-29 cells. Although the cytotoxic effect was less pronounced in HeLa tumor cells, LCEO-KN was more active against Hela than non-tumor cells. LCEO-KN and LCEO-CP inclusion complexes were efficient against both toxigenic fungi, A. flavus and F. verticillioides. Therefore, the molecular inclusion of LCEO into β-CD was successful, as well as the preliminary biological results, evidencing that the β-CD inclusion process may be a viable alternative to facilitate and increase future applications of this EO as therapeutic medication, food additive and natural antifungal agent.