Encapsulation of essential oils with cyclodextrins can protect their active compounds from environmental conditions and improve their aqueous solubility, hence increasing their functional capabilities as additives. The purpose of this study was to characterize the physico-chemical properties and bio-efficacies, antioxidant and antibacterial activities, of the encapsulated black pepper essential oil in hydroxypropyl-β-cyclodextrin (HPβCD), in comparison with the major ingredient in the oil, β-caryophyllene. The difference in encapsulation efficiency of the pure compound and the black pepper oil results from the presence of other components in the black pepper oil such as limonene, δ-3-carene and pinene. Although the inclusion complexes increase their stability, they gave slightly lower antioxidant activity as a result of the HPβCD was blocking the functional groups of active compounds during reaction with DPPH radicals. Instead, after encapsulated in HPβCD, the antibacterial activity of black pepper oil was improved by 4 times against both S. aureus and E. coli.