Hydrolysis of diaryl thiol esters with different substituents is studied in the presence of cyclodextrins under alkaline conditions. The presence of cyclodextrin enhances the rate of hydrolysis significantly and covalent catalysis by secondary hydroxy groups of cyclodextrin is proposed. The observed results and the proposed model find support in molecular dynamics simulations and free energy calculations. (© Wiley‐VCH Verlag GmbH & Co. KGaA, 69451 Weinheim, Germany, 2006)