Here we investigate the effect of cucurbituril (CB7) on the thermal and optical properties of fluorene–thiophene based conjugated polyelectrolytes. For this purpose, poly(9,9′-bis(6′′-(N,N,N-trimethylammonium)hexyl)fluorene-alt-co-thiophenelene) P1 and poly(9,9′-bis(6′′-(N,N,N-trimethylammonium)propyl)fluorene-alt-co-thiophenelene) P2 and their CB7-based polyrotaxane counterparts, P1CB7 and P2CB7, are synthesized by threading the part of the conjugated backbone of these polymers with CB7 during their synthesis. Threading efficiency in the P1CB7 containing hexyl pendant of as high as 50% is achieved, but in the case of P2, with the propyl pendant, only around 15% is achieved. We observed significant changes in the optical properties of both P1CB7 and P2CB7 with respect to their polymers P1 and P2. Fluorescent quantum yields of P1 and P2 which are 0.11 and 0.35 have increased to 0.46 and 0.55 for P1CB7 (>4 fold) and P2CB7, respectively. Moreover, polyrotaxanes compared to their polymers exhibit longer fluorescence lifetimes in the solution and the solid state thanks to the suppressed overall nonradiative recombination via encapsulation of the conjugated polymer backbone. Thermal analysis also indicates that polyrotaxanes have higher thermal stabilities than their polymer counterparts. In order to demonstrate the applicability of the synthesized materials, we also fabricated proof-of-concept light emitting diodes from P1 and its CB7-based polyrotaxane counterpart P1CB7. The CB7-integrating polymer showed lower turn-on voltages with high electroluminescence colour purity due to balanced charge injection in P1CB7 as compared to the P1 polymer.