One of the major goals of modern supramolecular chemistry, with important practical relevance in many technical fields, is the development of synthetic host/guest partners with ultrahigh affinity and selectivity in water. Currently, most association pairs exhibit micromolar affinity or weaker, and there are very few host/guest systems with K > 10 M, apparently due to a barrier imposed by enthalpy/entropy compensation. This present study investigated the threading of a water-soluble tetralactam cyclophane by a deep-red fluorescent squaraine guest with flanking polyethylene glycol chains, an association process that is dominated by a highly favorable enthalpic driving force. A squaraine structure was rationally designed to permit guest back-folding as a strategy to greatly expand the hydrophobic surface area that could be buried upon complexation. Guided by computational modeling, an increasing number of N-benzyl groups were appended to the squaraine core, so that, after threading, the aromatic rings could fold back and stack against the cyclophane periphery. The final design iteration exhibited an impressive combination of fluorescence and supramolecular properties, including ratiometric change in deep-red emission, picomolar affinity ( K = 5.1 × 10 M), and very rapid threading ( k = 7.9 × 10 M s) in water at 25 °C. Similar excellent behavior was observed in serum solution. A tangible outcome of this study is a new cyclophane/squaraine association pair that will be a versatile platform for many different types of fluorescence-based imaging and diagnostics applications. From a broader perspective, guest back-folding of aromatic groups is a promising new supramolecular stabilization strategy to overcome enthalpy/entropy compensation and produce ultrahigh affinity [2]pseudorotaxane complexes in water and biological media.