In nature, enzymes at specific folded conformations exhibit high substrate complementarity, enabling them to efficiently and selectively catalyze biochemical reactions. Inspired by enzymes, coordination cages with conformational dynamics have been designed and are receiving increasing attention due to their versatile applications in allosteric guest binding and catalysis. We present here two enzyme-mimicking adaptive macrocycle-based coordination cages, Pd2L12 and Pd2L22, from macrocycle-based ligands (L1 and L2) and the encapsulation and stabilization of Lindqvist polyoxometalates anions M6O192− (M = W or Mo) in neutral aqueous solution. X-ray crystallographic studies have verified the formation of 1:1 host-guest complexes of two Pd2L2 cages and the W6O192−. anion, via an induced-fit folding mechanism. Compared with the free host, Pd2L12 exhibited an induced-fit semi-folded conformation in the inclusion complex, while Pd2L22 adopted an induced-fit fully-folded conformation. Moreover, the Mo6O19⊂Pd2L2 host-guest complexes demonstrate high yield and selectivity in the oxidative decontamination reaction of the sulfur mustard simulant, 2-chloroethyl ethyl sulfide. This work not only sheds light on the importance of conformational adaptability in enzyme-like systems but also paves the way for protecting labile POM clusters via host-guest encapsulation toward enhanced catalytic performance in aqueous solution.