Phospholipids are major components of cell and organelle membranes, blood lipoproteins, and lung surfactant. The interaction of phospholipids with water is critical to the formation, maintenance, and function of each of these important biological complexes. This chapter reviews some of the extensive literature on the hydration properties of various phospholipids. In Sec. II we begin with a brief description of the assembly of lipid aggregates in water and some of the factors responsible for the formation of the various hydrated phospholipid phases. Section III presents data on the amount of water imbibed by phospholipids as obtained from a variety of biophysical techniques. We emphasize the lamellar or bilayer phase, which is the structural backbone of biological membranes. In this section, the hydration properties of the most common membrane phospholipids, including zwitterionic and charged phospholipids, are compared, and the location of water in phospholipid bilayers and the structural effects of dehydration are detailed. Section IV presents an analysis of phospholipid hydration in terms of inter- and intrabilayer forces and the energetics of hydration of phospholipid bilayers. In particular, in this last section we discuss why the various classes of phospholipids have their specific hydration properties as described in Sec. III.