The aldol condensation of indane-1,3-dione (ID) to give 'bindone' in water is catalysed by an M 8 L 12 cubic coordination cage (H w ). The absolute rate of reaction is slow under weakly acidic conditions (pH 3-4), but in the absence of a catalyst it is undetectable. In water, the binding constant of ID in the cavity of H w is ca. 2.4 (±1.2) × 10 3 M −1 , giving a ∆G for the binding of −19.3 (±1.2) kJ mol −1 . The crystal structure of the complex revealed the presence of two molecules of the guest ID stacked inside the cavity, giving a packing coefficient of 74% as well as another molecule hydrogen-bonded to the cage's exterior surface. We suggest that the catalysis occurs due to the stabilisation of the enolate anion of ID by the 16+ surface of the cage, which also attracts molecules of neutral ID to the surface because of its hydrophobicity. The cage, therefore, brings together neutral ID and its enolate anion via two different interactions to catalyse the reaction, which-as the control experiments show-occurs at the exterior surface of the cage and not inside the cage cavity.