Essential oils (EOs) are primarily isolated from medicinal plants and possess various biological properties. However, their low water solubility and volatility substantially limit their application potential. Therefore, the aim of the current study was to improve the solubility and stability of the Mosla Chinensis (M. Chinensis) EO by forming an inclusion complex (IC) with β-cyclodextrin (β-CD). Furthermore, the IC formation process was investigated using experimental techniques and molecular modeling. The major components of M. Chinensis ‘Jiangxiangru’ EOs were carvacrol, thymol, o-cymene, and terpinene, and its IC with β-CD were prepared using the ultrasonication method. Multivariable optimization was studied using a Plackett-Burman design (step 1, identifying key parameters) followed by a central composite design for optimization of the parameters (step 2, optimizing the key parameters). SEM, FT-IR, TGA, and dissolution experiments were performed to analyze the physicochemical properties of the ICs. In addition, the interaction between EO and β-CD was further investigated using phase solubility, molecular docking, and molecular simulation studies. The results showed that the optimal encapsulation efficiency and loading capacity of EO in the ICs were 86.17% and 8.92%, respectively. Results of physicochemical properties were different after being encapsulated, indicating that the ICs had been successfully fabricated. Additionally, molecular docking and dynamics simulation showed that β-CD could encapsulate the EO component (carvacrol) via noncovalent interactions. In conclusion, a comprehensive methodology was developed for determining key parameters under multivariate conditions by utilizing two-step optimization experiments to obtain ICs of EO with β-CD. Furthermore, molecular modeling was used to study the mechanisms involved in molecular inclusion complexation.