In this work, series of β-Cyclodextrin coated MoO3-Fe3O4 nanocomposites were successfully synthesized by using the sol-gel technique to improve their optical properties with the photocatalytic activity of Fe3O4. The prepared material were analyzed by using sophisticated characterization techniques like powder XRD, FT-IR, UV-DRS, FE-SEM, HR-TEM, RAMAN, BET, and XPS. The X-ray diffraction spectra analyzed that, it shows the nanocrystalline nature of synthesized materials. The indirect allowed transition optical energy band gap of nanocomposites is lies between 2.67 to 1.71 eV. The FE-SEM study revealed the nano-flakes to change occurs in the morphology of nanocomposites sample also it gives estimated size in between 30-50 nm. The BET analysis show mesoporous nature of nanocomposites and XPS spectra shows the elemental composition on surface of the synthesized sample. The proficiency of the nanocomposites were tested for the photodegradation of the methylene blue dye (MB) under sunlight at room temperature in presence of H2O2. The pure MoO3 and Fe3O4 material gives 38.21 % and 77.10 % photodegradation of MB respectively. In series lies between 5% β-Cyclodextrin coated MoO3-Fe3O4 (5βMF) shows excellent photocatalytic activity which degrades 91.62 % of MB at neutral pH. Thus, the photodegradation reaction is effectively attributed to charge carrier separation and reduced optical band gap energy due to enhanced photocatalytic activity.