The recycling of dyes from dye wastewater is one of the most challenging problems in wastewater treatment. In this study, a pseudo‐polyrotaxane cyclodextrin based PVA/poly (acrylamide‐co‐acrylic acid) hydrogel was prepared by UV‐initiated polymerization. The network structure of the hydrogel and the performance on the dye absorption were adjusted by controlling the content of cyclodextrin. The study was mainly focused on the absorption of methylene blue (MB) in different environments, selectivity of absorption in mixed solutions and the cyclic absorption behavior. At room temperature, the absorption efficiency of this hydrogel for MB and methylene green reached 91.37% and 94.23%, respectively. In addition, the hydrogel exhibited highly selective absorption towards MB in mixed dye solutions. In the absorption‐desorption cyclic experiments, a more cost‐effective and environmental friendly solvent, a mixture of ethanol and water, was used, and after ten cycles, the highest absorption efficiency was basically maintained. Hence, the hydrogel is expected to be a candidate for more efficient and economical absorbent material in dye wastewater treatment.