Encapsulation of nickel(II) complex of the Schiff base-type ligand (salicylidene-p-aminobenzoic acid) in the intracrysatalline nano-pores of zeolite-Y is reported. The zeolite-encapsulated trinuclear Ni(II)-Schiff base complex was prepared by diffusion of the ligand through pores of the zeolite, already exchanged with the respective metal (flexible ligand method). The host/guest compound obtained was characterized by elemental analysis, spectroscopic (IR and electronic) studies, surface texture, thermal analysis and powder x-ray diffraction (XRD). The solids were subjected to in situ FT-IR study of adsorbed carbon monoxide.  IR and UV-vis as well as XRD data indicate that the chemical stoichiometry of the complex remains intact upon encapsulation and the geometric environment around the metal ions is a distorted tetrahedral. Experimental evidence indicates that the chemisorption of carbon monoxide is indeed catalyzed by the zeolite-encapsulated complex. Sorption of CO results in the appearance of a series of surface carbonyl species: linear Ni^II-CO (2198 cm⁻¹), bridged CO (1896 cm⁻¹), C=O derived from acetone-like species (1728 and 1686 cm^-1) and physisorbed CO₂ (2351 cm⁻¹).  The acetone-like species are stable upon evacuation which can be considered as bound to Lewis acid sites in the zeolite Y. These species are most significant on the zeolite-encapsulated complex than on metal-exchanged zeolite.