B'-form DNA differs from standard B-form DNA by a more narrow minor groove, which is filled in the B'-form by a highly ordered and geometric array of water molecules. A-tracts (sequences of contiguous (5')ApA(3') and/or ApT steps without TpA steps or C.G base pairs) have the greatest propensity to adopt the B'-form. We show that binding of a protein (P22 c2 repressor N-terminal domain) to DNA induces the B to B' transition of the central non-contacted region of the operator, regardless of the DNA sequence. P22R NTD provides an experimental system for studying B'-DNA of any sequence, even those with C.G base pairs. One can determine how hydration and distributions of ions of B'-DNA change with sequence, while holding DNA conformation fixed. Here we describe three-dimensional structures of P22R NTD-DNA complexes containing (5')ApT(3'), TpA, GpC or CpG at the center of the non-contacted region of the DNA operator. All these grove steps are in the B'-form, with a narrow minor rove and a spine of hydration. Many features of the water interactions within the minor groove are conserved for the sequences ApT, TpA and GpC. The primary water molecules, at the base of the hydration motif, are highly restrained in translation and rotation. These water molecules are in discrete sites, interacting exclusively with hydrogen bond acceptors in optimally spaced binding pockets formed by DNA functional groups on the floor and walls of the minor groove. The water interactions at the CpG step differ fundamentally from those of ApT, TpA or GpC. At the CpG step, the primary water molecule interacts with a mixture of hydrogen bond donors and acceptors at closely spaced and overlapping binding sites. The translational and rotational restraints on the primary water molecules are released by the 2-amino groups of CpG step, breaking the entire hydration motif. The work presented in this chapter suggests that stability of DNA complexes with minor groove ligands is modulated in a structurally comprehensible way by the entropy of release of water molecules from the minor groove.