A water-based narrow-band high-efficiency dye laser was designed by means of a supramolecular host-guest chemical approach. The lasing characteristics of rhodamine B and sulforhodamine B (Kiton Red S) dyes in aqueous solution with the macrocyclic host cucurbit[7]uril (CB7) as additive were investigated in a narrow-band dye laser setup. Significant improvements in both photostability and thermo-optical properties of the aqueous CB7-complexed dye systems were observed as compared to the uncomplexed dyes in ethanol solution. The tuning curves for the new dye-CB7-water systems were constructed by measuring the laser output at different wavelengths, which showed similar peak efficiencies and red-shifted gains compared to the ethanolic solutions of the dyes, while dye laser operation revealed comparable pump threshold energies and slope efficiencies. The combined results render the dye-CB7-water system an attractive active medium for high-repetition rate dye laser operation.