Calorimetric measurements have been made on the thermodynamics of the chain-melting phase transition of saturated diacylphosphatidylethanolamines, with chains containing 12-20 carbons, as a function of water content. The transition temperature, Tt, and the transition enthalpy, and entropy all decrease with an increase in water content; however, the effect on Tt lessens with an increase in chainlength. These results are compared with a theoretical description of lipid hydration in terms of the interlamellar water polarization (i.e., modified water structure) in the interbilayer region. The measured free energy, enthalpy and entropy of the transition and the transition temperature have an approximate hyperbolic tangent dependence on water content, infinity tanh (dw/2 xi), where dw is the interlamellar water-layer thickness and xi approximately equal to 0.25 nm is the water-order correlation length, in agreement with the theory. Auxiliary x-ray diffraction experiments yield results on the repulsive hydration forces between lipid lamellae consistent with the theory, and allow an estimate of the water orienting potential of the interface. The molecular origin of this potential is discussed in electrostatic terms, and the values of its associated molecular parameters are found to yield the right size of hydrational thermodynamic quantities. The theory thus provides an integrated, clear, and simple approach to the hydration properties of lipid membranes.