A high-precision technique for the simultaneous measurement of the speed of sound and density has been used to characterize the inclusion of decyltrimethylammonium bromide (DTAB) in the cavity of cyclodextrin (beta-CD) in water. The partial derivatives of the density, speed of sound, volume, and compressibility with respect to the molality of the guest at fixed moles of water and beta-CD have been obtained at 298.15 K, for different concentrations of the host molecule. The associated thermodynamic properties, molar volumes and compressibilities, are very different in the presence or in the absence of CD, when extrapolated to infinite dilution. This can only be explained in terms of drastic changes in the hydration state of the host and guest in the reaction. A model involving hydration molecules of water for the reaction has been proposed, yielding 6.5 water molecules within the CD in solution, as in solid state. The compressibility results can be explained in terms of the differences in hydrophobicity of the water and the surfactant in the process. H-1 NMR together with molecular modeling have been used to characterize the microscopic structure of the complex, with results consistent with those from analysis of the thermodynamic properties.