Two guest molecules (eugenol and (-)-menthol) were investigated on inclusion complex formation with water-soluble quaternized β-CD grafted with chitosan (QCD-g-CS). The inclusion complexes were prepared at varying mole ratios between eugenol or (-)-menthol and β-CD (substituted on QCD-g-CS) by a conventional shaking method and obtained as solid powder by freeze-drying process. The results showed that encapsulation efficiency %EE decreased with increasing of initial eugenol or (-)-menthol loading whereas %loading increased with increasing of initial eugenol or (-)-menthol loading. The results indicated that inclusion complex formation between eugenol and QCD-g-CS was more favorable than that of (-)-menthol. To clarify this mechanism, molecular dynamics simulations were performed to explore their binding energy, solvation energy and total free energy of those complexes. It was found that the total free energy (ΔG) of eugenol and (-)-menthol against QCD-g-CS (mole ratio of 1) in water-explicit system were -2108.91 kJ/mol and -344.45 kJ/mol, respectively. Moreover, molecular dynamic simulation of eugenol absorbed on surface QCD-g-CS (-205.73 kJ/mol) was shown to have a higher negative value than that of (-)-menthol on QCD-gCS (3182.31 kJ/mol). Furthermore, the release characteristics of the encapsulated powder were also investigated in simulated saliva pH 6.8 at 32 °C. The results suggested that (-)-menthol had higher release rate from the complexes than eugenol. In all cases, the release characteristics for those guest molecules could be characterized by the limited-diffusion kinetics.