Arylazopyrazoles represent a new family of molecular photoswitches characterized by a near-quantitative conversion between two states and long thermal half-lives of the metastable state. Here, we investigated the behavior of a model arylazopyrazole in the presence of a self-assembled cage based on Pd–imidazole coordination. Owing to its high water solubility, the cage can solubilize the E isomer of arylazopyrazole, which, by itself, is not soluble in water. NMR spectroscopy and X-ray crystallography have independently demonstrated that each cage can encapsulate two molecules of E-arylazopyrazole. UV-induced switching to the Z isomer was accompanied by the release of one of the two guests from the cage and the formation of a 1:1 cage/Z-arylazopyrazole inclusion complex. DFT calculations suggest that this process involves a dramatic change in the conformation of the cage. Back-isomerization was induced with green light and resulted in the initial 1:2 cage/E-arylazopyrazole complex. This back-isomerization reaction also proceeded in the dark, with a rate significantly higher than in the absence of the cage.