In this study, we have considered an experimentally synthesized organic donor–acceptor (D–A) macrocycle (CPP–TCAQ) and have modified it by incorporating different acceptor groups. We have performed density functional theory and classical molecular dynamics studies on these D–A macrocycles. We have clearly shown that cyclo[10]paraphenylene–2,6-tetracyanoanthraquinodimethanylene (CPP–TCAQ) isomers interact specifically with one particular peptide sequence tyr–leu–ala, over its structural isomer, tyr–ala–leu. However, other functionalized macrocycles bind to the tyr–ala–leu peptide sequence over tyr–leu–ala. Our calculations show that the presence of hydrogen bonds as well as π–π interactions responsible for this specific selection. Interestingly, it is the additional charge transfer induced dipolar interactions that favour binding of the tripeptide with the bulky C-terminal leucine amino acid, tyr–ala–leu. We confirmed that these host–guest complexes are stable in water medium as well as at room temperature. Thus, these hosts can bind effectively to any protein fragment bearing a particular tripeptide. Interestingly, the macrocycle, which recognizes the peptide sequence with a bulky C-terminal amino acid, also shows photophysical properties. The reasons for this happen to be the same (dipolar interactions introduce dipole allowed states for optical absorption as well as attracting the oppositely oriented dipolar groups). Recognition of the peptide sequence with a bulky C-terminal group is carried out for the first time with this functionalised macrocycle, which in addition shows photophysical properties.