The purpose of this study was to evaluate the potential of a newly modified cyclodextrin derivative, water-soluble β-cyclodextrin–epichlorohydrin (β-CD), as an effective drug carrier to enhance the poor solubility and bioavailability of galangin (GAL), a poorly water-soluble model drug. In this regard, inclusion complexes of GAL/β-CDP were prepared. UV-VIS spectrophotometry, Fourier-transform infrared spectroscopy (FTIR), X-ray crystallography (XRD), zeta potential analysis, particle size analysis, field emission scanning electron microscopy (FESEM), and transmission electron microscopy (TEM) were applied to characterize the synthesized GAL/β-CD. Michigan Cancer Foundation-7 (MCF-7; human breast cancer cells) and rat embryo fibroblast (REF; normal cells) were employed to examine the in vitro cytotoxic effects of GAL/β-CD using various parameters. The dye-based tests of MTT and crystal violet clearly exhibited that GAL/β-CD-treated cells had a reduced proliferation rate, an influence that was not found in the normal cell line. The cells’ death was found to follow apoptotic mechanisms, as revealed by the dye-based test of acridine orange/ethidium bromide (AO/EtBr), with the involvement of the mitochondria via caspase-3-mediated events, as manifested by the Rh 123 test. We also included a mouse model to examine possible in vivo toxic effects of GAL/β-CD. It appears that the inclusion complex does not have a significant influence on normal cells, as indicated by serum levels of kidney and liver enzymatic markers, as well as thymic and splenic mass indices. A similar conclusion was reached on the histological level, as manifested by the absence of pathological alterations in the liver, kidney, thymus, spleen, heart, and lung.