An inclusion complex of podophyllotoxin (PPT) with γ‐cyclodextrin (γ‐CD) was prepared. The behavior, characterization, and water solubility of the inclusion complex were carefully investigated via fluorescence spectroscopy, thermogravimetry, differential scanning calorimetry, X‐ray diffraction analysis, and 1H and 2D nuclear magnetic resonance spectroscopy. Furthermore, antitumor activity to human cancer lines and toxicity in mice were studied. Results showed that the inclusion complex formed in a 1:1 ratio with a considerable apparent stability constant Ks (4245.5 L·mol−1). Water solubility was considerably improved. In addition, the anticancer activity of the inclusion complex was better than that of cis‐platinum (DDP, positive control). Most importantly, the toxicity of podophyllotoxin inclusion complex reduced and became more safety to mice which will be great valuable to research its applications as a kind of antitumor drug to human in the further.