To mimic binding to biological membranes, the extent of interaction of the efficient food dye Sunset Yellow with a cationic surfactant, cetyltrimethylammonium bromide, was probed by quantifying its absorption and fluorescence emission spectra as a function of premicellar to post‐micellar surfactant concentration. The characteristics of the partition behaviour and spectral‐luminescent properties of Sunset Yellow–surfactant have been evaluated qualitatively as well as quantitatively for various cetyltrimethylammonium bromide concentrations. With the help of mathematical models, the water–micelle partition coefficient, the Sunset Yellow–cetyltrimethylammonium bromide binding constant, the binding capacity, and the degree of counterion binding were calculated at 25 °C under various pH conditions. The solubilisation of Sunset Yellow is also discussed from the thermodynamics viewpoint by considering the standard free energy change of dye solubilisation and the Sunset Yellow–cetyltrimethylammonium bromide binding energy. The high values of all these interactions indicate that the dye, being organic in nature, is partitioned largely from the aqueous environment to the palisade layer of the micelle. The solubilisation of the dye is enhanced by switching the pH to suppress the self‐aggregation of dye molecules. Combined with electrostatic forces, the hydrophobic interactions also play a promising role in the solubilisation of Sunset Yellow in the outer core of the micellar interior.