Host‐guest complexes of protonated (AcH+) and neutral (Ac) forms of biologically important acridine dye with p‐sulfonatocalix[4]arene (SCX4) and their responses towards acetylcholine (AcCh) as a competitive binder has been investigated using photochemical studies. Unlike Ac, the AcH+ undergoes strong binding with SCX4 and their differential binding results in a large upward pKa shift for the bound dye. Dye binding to SCX4 causes a drastic fluorescence quenching, witnessing a strong fluorescence “turn OFF”, which is switched to strong fluorescence “turn ON” by the presence of neurotransmitter, AcCh, acts as a stimulus cum competitive binder. This is a unique system showing controlled binding and release for both AcH+ and Ac forms of the dye triggered by AcCh, convincingly established through absorption, pKa tuning, fluorescence modulation and NMR shift. Fluorescence “OFF/ON” switching observed in this study demonstrates an efficient indicator displacement methodology, achieving a control over the selectivity in binding and release of the dye/analyte, having prospective uses in designing new optical sensors and smart functional materials for analytical and biological applications.