The disaccharide trehalose is accumulated by microorganisms, such as yeasts, and multicellular organisms, such as tardigrades(1,2), when conditions of extreme drought occur. In this way these organisms can withstand dehydration through the formation of an intracellular carbohydrate glass, which, with its high viscosity and hydrogen-bonding interactions(3,4), stabilizes and protects the integrity of complex biological structures and molecules. This property of trehalose can also be harnessed in the stabilization of liposomes(5), proteins(6) and in the preservation of red blood cells(7), but the underlying mechanism of bioprotection is not yet fully understood. Here we use positron annihilation lifetime spectroscopy to probe the free volume of trehalose matrices; specifically, we develop a molecular picture of the organization and mobility of water in both amorphous and crystalline states. Whereas in amorphous matrices, water increases the average intermolecular hole size, in the crystalline dihydrate it is organized as a confined one-dimensional fluid in channels of fixed diameter that allow activated diffusion of water in and out of the crystallites. We present direct real-time evidence of water molecules unloading reversibly from these channels, thereby acting as both a sink and a source of water in low-moisture systems. We postulate that this behaviour may provide the overall stability required to keep organisms viable through dehydration conditions.