The action of the penetration-enhancing agent, dimethyl sulfoxide (DMSO), on phospholipid monolayers was investigated at the air water interface using a combination of experimental techniques and molecular dynamics simulations. Brewster angle microscopy revealed that DPPC monolayers remained laterally homogeneous at subphase concentrations up to a mole fraction of 0.1 DMSO. Neutron reflectometry of the monolayers in combination with isotopic substitution enabled the determination of solvent profiles as a function of distance perpendicular to the interface for the different DMSO subphase concentrations. These experimental results were compared to those obtained from molecular dynamic (MD) simulations of the corresponding monolayer systems. There was excellent agreement found between the MD-derived reflectivity curves and the measured data for all of the H/D contrast variations investigated. The MD provide a detailed description of the distribution of water and DMSO molecules around the phosphatidylcholine headgroup, and how this distribution changes with increasing DMSO concentrations. Significantly, the measurements and simulations that are reported here support the hypothesis that DMSO acts by dehydrating phosphatidylcholine headgroup, and as such provide the first direct evidence that it does so primarily by displacing water molecules bound to the choline group.